NOTICE OF PUBLIC MEETING PHOENIX AVIATION ADVISORY BOARD

Pursuant to A.R.S. Section 38-431.02, notice is hereby given to the members of the PHOENIX AVIATION ADVISORY BOARD, and to the general public, that the PHOENIX AVIATION ADVISORY BOARD will hold a meeting open to the public on Thursday, September 17, 2015 at 3:00 p.m. located at Terminal 2, Phoenix Aviation Advisory Board Conference Room, Second Floor, 3400 E. Sky Harbor Blvd., Phoenix, Arizona. Pursuant to Arizona Revised Statutes, Section 38-431.02B, notice is given that the Phoenix Aviation Advisory Board may vote to go into Executive Session, or Sessions, for discussion or consultation, for legal advice with the attorney or attorneys of the public body for any agenda items listed below, as authorized by Arizona Revised Statutes, Section 38-431.03 (A)(3) or for discussion of records and/or information that is exempted by law from public disclosure, as authorized by Arizona Revised Statutes, Section 38-431.03(A)(2). If authorized by a majority vote of the Phoenix Aviation Advisory Board, the Executive Session will be held immediately after the vote and will not be open to the public. If a decision is requested, the Phoenix Aviation Advisory Board may decide the matter in the public meeting or defer the decision to a later date. The agenda items that may be subject to an Executive Session pursuant to Arizona Revised Statutes, Sections 38-431.03 (A) (2) and 38-431.03 (A) (3) are as follows: Items 5, 6, 7, 8, 9 and 10. One or more board members may participate via teleconference. Agenda items may be taken out of order. The agenda for the meeting is as follows: 1. Call to Order

Chairman Berry

2. Announcements/Reports by the Aviation Director

Mr. Paul Blue

3. Announcements/Reports by the Airline Station Manager

Mr. John Daley

4. Approval of the August 20, 2015 Meeting Minutes This item is for possible action.

Chairman Berry

5. Corporate Hangar Lease with Arizona Department of Public Safety This item is for discussion and possible action.

Ms. Roxann Favors

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6. Enter Lease with AeroTurbine at Phoenix Goodyear Airport This item is for discussion and possible action.

Ms. Roxann Favors

7. Arizona State Lottery Retail Store This item is for information and discussion.

Ms. Roxann Favors

8. Ground Transportation Update This item is for information and discussion.

Mr. Steve Grubbs

9. Valley Airspace and Noise Update This item is for information and discussion.

Mr. Jordan Feld

10. Sky Harbor Website and Technology Update This item is for information and discussion.

Mr. Mike Youngs

11. Advisory Board Information and Follow-Up Requests (not for discussion or recommendation)

Chairman Berry

12. Call to the Public: This is the time for the public to comment. Members of the Board may not discuss items that are not specifically identified on the agenda. Therefore, pursuant to A.R.S. Section 38-431.01(H), action taken as a result of public comment will be limited to directing staff to study the matter, responding to any criticism, or scheduling the matter for further consideration and decision at a later time.

Chairman Berry

13. Adjournment

Chairman Berry

For further information, please call Tyler Maheu, Administrative Assistant II, Aviation Department at 602-273-3382. For reasonable accommodations, please contact Tyler Maheu /Aviation Administration at Voice/602-273-3382 or TTY relay 1-800-781-1010 as early as possible to coordinate needed arrangements. The next Phoenix Aviation Advisory Board meeting is scheduled to take place Thursday, October 15, 2015.

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PHOENIX AVIATION ADVISORY BOARD MEETING MINUTES

August 20, 2015 PAAB Conference Room, Terminal 2, Second Floor,

3400 E. Sky Harbor Boulevard, Phoenix, Arizona 85034. Board Members Present Leezie Kim - Chair John Berry – Vice-Chair Andrew Cohn Pete Gorraiz Alan Powell

Edward Maldonado Verma Pastor Stephanie Cherny Byron Jones John Daley- Ex-Officio Member

Staff Present Tamie Fisher Chad Makovsky Jo Ellen McBride Deborah Ostreicher Jay DeWitt Roxann Favors Stephen Grubbs Julie Rodriguez

Mike Youngs Terrence Whatley Paula Kucharz Bobbie Reid Art Fairbanks Kyle Kotchou Sam Gonzales Paul Pestrivas

Robert Hawes Randy Payne Andrea Sandoval Tracy Montgomery LaVonne Morris Tyler Maheu Bridget Penton

Members of the Public Present Dave Peterson Dawn Gilbertson Scott Sikel

Item 1 - Call to Order Chairwoman Kim called the meeting to order at 3:00 p.m. Item 2 – Announcements/Reports by the Aviation Director Assistant Aviation Director Chad Makovsky was pleased to introduce Mr. Byron Jones, the newest member of the Phoenix Aviation Advisory Board (PAAB). Mr. Makovsky stated Mr. Jones was currently the Chief Financial Officer of University of Phoenix and had more than 25 years of experience in corporate and divisional finance. Mr. Makovsky stated the Aviation Department was excited about his addition to the

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Board as he had over eight years of airline experience working for both American and Delta airlines. Chairwoman Kim stated Mr. Jones was a pilot. Mr. Gorraiz added he was a graduated Tuskegee Pilot. Mr. Makovsky stated his hands on experience with and knowledge of route economics, airport customer experience and operations, and facility leases would make him an invaluable member of the team and important resource for the Aviation Department. Mr. Makovsky stated he was also pleased to share a big announcement that was made earlier that week. He added, after conducting an extensive national recruitment, Mr. James Bennett, who went by Jim, had been selected to serve as the Aviation Director for the City of Phoenix system of airports. Mr. Makovsky stated Mr. Bennett was very familiar with Sky Harbor, Deer Valley, and Goodyear airports. He added from 1988 to 1996, Jim was Assistant Aviation Director at Sky Harbor. Mr. Makovsky stated he went on to serve as the President and Chief Executive Officer of the Metropolitan Airports Authority, as well as Chief Executive Officer for the Abu Dhabi Airports Company in the United Arab Emirates. Mr. Makovsky stated he held an undergraduate degree in Aviation Management from Auburn University and a graduate degree in Public Administration from the University of Michigan. Mr. Makovsky stated he had previously served as President of the Arizona Airports Association and Chairman of the American Association of Airport Executives, the world’s largest professional organization for airport executives. Mr. Makovsky added Mr. Bennett would begin working for the City on October 5th, at which time Mr. Blue would no longer serve as Interim Aviation Director and would return to his Deputy City Manager role overseeing the airport and other City Departments. Mr. Makovsky stated he we would enjoy working with Jim and the Aviation Department and City of Phoenix would benefit from his world-wide experience of 35 years in aviation. He added he looks forward to introducing him in October. Mr. Makovsky stated the June 2015 passenger statistics for Sky Harbor showed a 4.6 percent increase over June 2014. He added the total passenger count for fiscal year 2015 through June was 43 million, a 4.7 percent increase over the same portion of fiscal year 2014. Mr. Makovsky stated the airport was on track for the busiest calendar year in Sky

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Harbor History. Mr. Makovsky stated on Saturday, August 1, Boutique Air began their daily service to Show Low Regional Airport. He added the route was operated on Essential Air Service contract, which was a federal program that helped ensure air service to small communities throughout the nation. Mr. Makovsky stated Boutique was currently operating 18 weekly roundtrip flights with fares starting at $59 each way. Mr. Makovsky stated this would be the last meeting with Ms. Leezie Kim as Chair of the Board. He thanked her for her interest, engagement, guidance and leadership. Mr. Makovsky stated this concluded the updates to the Board. Ms. Kim thanked Mr. Makovsky and stated it had been a pleasure being part of an amazing program that was not given much credit. Ms. Kim stated she had met with Mr. James Bennett to express the importance of the airport. She added that his resume reflected significant experience. Ms. Kim thanked Mr. Gorraiz and Mr. Cohn for being part of the Aviation Director interview process and sitting in on the interview panels. Mr. Cohn noted he was very impressed by the City Manager’s Office. He added they were very professional and that he was pleased with the evolution of the process, stating it served the citizens well. Mr. Cohn stated the Board wanted the same execution as Dubai, but less budget. Item 3 – Announcements/Reports by the Airline Station Manager None. Item 4 - Approval of the June 18, 2015 Meeting Minutes Mr. Gorraiz motioned for approval of the minutes. Ms. Cherny seconded the motion. The motion was approved 9:0. Item 5 – Election of new Chair for the Phoenix Aviation Advisory Board for the term of September 1, 2015 through August 31, 2016 Chairwoman Kim stated this was her last meeting and it was time to make a motion to select a new chair. She added the nominee was Mr. John Berry. Mr. Cohn motioned to elect Mr. Berry as Chair. Ms. Pastor seconded the motion. The motion was approved 9:0.

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Item 6 – Election of new Vice Chair for the Phoenix Aviation Advisory Board for the term of September 1, 2015 through August 31, 2016 Ms. Kim stated it was time to elect a Vice Chair for the September 1, 2015 through August 31, 2016 term. Mr. Berry motioned to elect Mr. Alan Powell for the position of Vice Chair for the Phoenix Aviation Advisory Board. Ms. Cherny second the motion. The motion was approved 9:0. Item 7 – Fiscal Year 2015 – 16 Airline Rates and Charges Deputy Aviation Director Jay DeWitt stated the Fiscal Year 2014 – 2015 (FY14-15) closed on June 30. He noted it was a fantastic year for Phoenix Sky Harbor International Airport (PHX) with a 4.7 percent increase in passenger traffic from 41 – 43 million passengers compared to the 1.3 percent growth in FY13 – 15. Mr. DeWitt stated the preliminary results showed total revenue in FY14-15 up around nine million dollars and total expenditures down by approximately six million dollars, due to decreases in contractual services and interest savings from a recent bond refunding. Mr. DeWitt stated the revenue increased because of the passenger count and Rental Car Center (RCC) numbers. Mr. DeWitt stated this was the second year of increased revenue and decreased expenses. Mr. DeWitt stated the terminal rates were down by 8.3 percent. Mr. DeWitt stated the landing fees were down by one percent, West Air Cargo was down by 1.7 percent, and the South Air Cargo was down by 2.8 percent leaving the airlines very pleased. Mr. DeWitt stated the airline cost requirement for the terminals decreased by 3.7 percent, the landing fee increased to 5.5 percent, West Air Cargo decreased by 1.7 percent, South Air Cargo decreased by 2.8 percent, and the total requirement decreased by .1 percent. Mr. DeWitt displayed a bar graph that showed the cost per enplanement with the current totals comparing the FY 13 – 14 totals.

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Mr. DeWitt stated the airlines continued to provide increasing levels of service to PHX for many reasons. He added one of the contributors to this profitability was our low cost structure. Mr. DeWitt stated the average hub airport cost-per-enplanement (CPE) was $10.57, according to Moody’s, which was $4.78 higher than PHX. Mr. DeWitt stated that while airport-related costs made up a relatively small portion of an airline’s total costs, which were led by things like fuel, aircraft and employee expenses, these were material savings for the airlines who serve PHX and a consideration during air service decisions. Mr. DeWitt stated the terminal costs were down by 3.7 percent because of the Passenger Information Paging System (PIPS) contract that the technology division took over in-house. He noted the division would save $600,000 yearly by taking over the PIPS contact. Mr. DeWitt stated there was an additional savings of $2 million per year on the general obligation bond refunding; however, this was offset by staffing costs related to absorbing the PIPS contract and the negotiated addition of the security checkpoint costs into the terminal rate. Ms. Kim asked if the reason to bring it in house was because it was not as demanding. Assistant Aviation Director Chad Makovsky stated he applauded Deputy Aviation Direct Mike Young for taking on the contract. He noted the major costs were because of the embedded maintenance costs for repair. Mr. Makovsky stated Mr. Young had really empowered his employees to work on this project to drive savings. Mr. DeWitt stated that costs for Air Cargo went without much fluctuation. Mr. DeWitt stated the common use fees for domestic travel went from $628 – $662. He continued the common use fees for international went from $314 - $430. Mr. DeWitt stated the Aviation Department worked with the airlines to come up with a common use methodology for two years and currently the international and domestic flights were utilizing the plan. Mr. DeWitt added the negotiated phased common use increase with airlines would accommodate new rate methodology that achieved full cost recovery, simplified the rate schedule, and made the use of common use gates an attractive alternative for smaller carriers.

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Mr. DeWitt stated FY-14 was fantastic and he would be looking forward to FY-15; however, he did not expect decreased fees because of the Terminal 3 modernization project. He noted there would be an expected 10 percent increase in the terminal rate. Mr. Cohn asked if the airlines would get a heads up before this happened. Mr. DeWitt stated yes, the Aviation Department provides a five year look ahead to airlines. Ms. Kim stated PHX had been remarkable and had some of the lowest rates when compared to other airports. Mr. Cohn stated the Department really did a good job. Mr. DeWitt stated the airlines got an excellent value. Mr. Daley asked what the cost per enplanement would increase to. Mr. Dewitt stated it would be closer to $7 than the current $5.79, which still put PHX well under the mean. Item 8 – Sky Train Outage Briefing Deputy Aviation Director Stephen Grubbs stated he was going to provide an update of the Phoenix (PHX) Sky Train outage. Mr. Grubbs stated outages are an occurrence the team plans for. Mr. Grubbs stated the PHX Sky Train had been in operation since April 8, 2013 and had transported passengers to terminal, parking facilities, and METRO light rail and bus. He added the train has over 13,000 daily passenger boardings. Mr. Grubbs stated he would provide an overview of the outage, the response, and the lessons learned. Mr. Grubbs stated the outage happened as a result of a contractor on the Terminal Three modernization project inappropriately cutting a communication line. Deputy Aviation Director Kyle Kotchou stated the incident occurred on August 7 at approximately 9:40 am when a worker from the demolition subcontractor cut a conduit wire that provided train system emergency stop capabilities to the Terminal 3 command center. He noted the system worked and shut off power to the train as it was intended.

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Mr. Kotchou stated the review of the incident in the field indicated that the conduit was cut despite the employee being instructed not to cut the conduits. He added the employee did not follow the work protocols in place. Mr. Kotchou stated that Hunt/Austin had a three tier protocol in place for demolition of conduits; 1. no conduits are to be demolished without an electrician present, 2. no conduits are to be cut unless painted green, and 3. a pre-demolition job walk with the workers is performed. Mr. Kotchou stated that the first two steps of the protocol were ignored and the worker was drug tested and removed from the site. Mr. Kotchou stated Hunt/Austin would employ four superintendents to watch the contractors at all times moving forward. He continued an additional aviation employee would also help monitor contractors. Mr. Grubbs stated there were four trains impacted by the outage with two stopped at the station and two on the guideway west of the East Economy Station. Mr. Grubbs stated Operations provided public address announcements on the stopped trains within minutes. Mr. Grubbs stated Bombardier escorted 45 passengers to the East Economy Station. He continued one wheel chair passenger from the same train was escorted by Fire personnel. Mr. Grubbs stated the landside supervisors implemented the bus contingency plan immediately. He continued the contingency plan involved taking buses off existing Rental Car Center (RCC) routes to cover the train locations. Mr. Grubbs stated the bus contingency plan was flexible and allowed for the landside supervisor to make decisions on bussing and overall management. Mr. Grubbs stated there were employees deployed to provide customer service to the passengers in terminals and at the curbs. Mr. Grubbs stated that during the debrief, Operations determined several needs including tighter controls on the contractors, dispatching fire immediately for all evacuations, and improving the bus contingency plan using temporary signs and better announcements over the public address system. Mr. Grubbs stated that the response to this incident was an overall success. He added that the Aviation Department utilized plans and procedures developed for outage events.

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Mr. Cohn stated that everyone plans for these things, but not for a contractor to cut a line and Aviation needed to hold those responsible accountable. Mr. Cohn stated those responsible needed to understand the cost and damage for caused by this outage. He added that the responsible employee needed to be held accountable. Mr. Cohn asked what the costs were. He added that there was significant media coverage of the event. Mr. Kotchou stated Aviation was compiling the cost. Mr. Cohn stated he wanted to participate in meetings with the responsible company. Mr. Daley thanked Mr. Grubbs and stated that there were no impacts to American Airlines. Mr. Powell asked how much training went into the bus contingency plan. Mr. Grubbs stated that Aviation holds refresher courses to make sure training is adequate. He added that Operations provides regular training on the Terminal 3 Sky Train platform with numerous additional tabletop exercises. Mr. Grubbs stated Operations also holds one full scale drill per year. Mr. Powell asked Mr. Grubbs if he thought Aviation should do more training for other people, not just employees. Mr. Grubbs stated it would be good to include stakeholders in customer service and emergency procedure training. Ms. Kim asked if Aviation had any passengers effected by the outage. Mr. Grubbs stated no passengers were effected that he was aware of. Ms. Pastor asked what kind of temporary signs Mr. Grubbs indicated in his presentation. Mr. Grubbs stated static signs that would be pre-staged. Ms. Pastor asked if there was a way to also use taxi cabs for inter-terminal passenger circulation instead of using only buses. Mr. Grubbs stated that it was a good idea for long term plans and would be considered for the future bus bridging plan.

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Mr. Gorraiz asked how long it would take passengers to get off the train guideway in such a situation and what was the evacuation procedure. Mr. Grubbs stated when the train loses power all cars stop in place but continue to have batter power for a fan and PA system. Mr. Grubbs stated in a non-emergency outage, an evacuation could be conducted on the guideway in 15 to 20 minutes. He continued a situation requiring fire personnel assistance could take slightly longer. Mr. Gorraiz asked if passengers have to walk on the guideway. Mr. Grubbs stated they do, but it is in the center of the guideway, far from the edge of the tracks. Ms. Kim asked if the trains have working air conditioning during an outage. Mr. Grubbs stated the air conditioning system on the trains does not operate when the power is out, but the battery-powered fans do. Assistant Aviation Director Chad Makovsky stated he had tested the impact of an air conditioning outage on trains before the system became operational by sitting in a train during hot weather for an hour. He continued the train got hot, and it was not ideal, but the fans kept air circulating. Ms. Pastor asked if there was a generator to push or pull the trains to the station in the event of a power outage. Mr. Grubbs stated the trains cannot be pushed or pulled and are only operable when there is electricity to the system. Item 9 – Parking Management Services Update Deputy Aviation Director Roxann Favors stated she was going to provide an update on the current status of the Airport Parking Management Service Contract. Ms. Favors stated the parking management contract was implemented after a Request for Proposal (RPF) process in 2010. Ms. Favors stated the contract was awarded to ACE Parking Management, Inc. (ACE). Ms. Favors stated under the contract, the City paid Ace an annual management fee and reimbursable expenses.

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Ms. Favors mentioned the management fee included corporate administrative overhead; such as management salaries and benefit plans, consulting services, licenses and permits. Ms. Favors stated the reimbursable expenses included salaries for approximately 200 employees, vehicle leases, vehicle maintenance, minibus circulators, insurance, equipment, and electric cart service. Ms. Favors stated the contract term was for five years with one five-year renewal option to be exercised at the sole discretion of the Aviation Director. Ms. Favors stated the Aviation Director intended to extend the Contract for the second five-year term effective October 7, 2015. She continued in July 2015, City Council only authorized the City Controller to disburse funds for a one year and then month-to-month term. Ms. Favors stated ACE Parking Management services operated and staffed all Phoenix Sky Harbor parking facilities and provided daily facility cleaning and custodial services. Ms. Favors stated parking revenue remained the largest non-aeronautical revenue source for Phoenix Sky Harbor International Airport with a revenue of almost $81 million in Fiscal Year (FY) 14-15. Ms. Favors stated there were 21,000 public parking spaces and over 2.8 million transactions in FY 14-15. Ms. Favors stated ACE also managed the parking facility circulators and sky carts. Ms. Favors stated Aviation staff would begin working on a professional services RFP for Parking Management Services. Ms. Favors stated the next step was to complete the RFP within 4-6 months and projected RFP release by July 2016. She continued the projected contract award date was late 2017. Mr. Jones asked why City Council asked to bring the contract back out onto the streets. Ms. Favors stated it had been 5 years since it was last exposed to the market. Mr. Cohn stated the political culture caused the revisit. Mr. Cohn stated he would like for the new Aviation Director to be briefed on the item and would like to hear his feedback.

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Item 10 – Rental Car Center (RCC) Revenue Contract Solicitation (RCS) Update Deputy Aviation Director Roxann Favors stated she would provide an update on the upcoming Rental Car Center solicitation. Ms. Favors stated the Rental Car Center (RCC) was unique to Phoenix. Ms. Favors stated the focus of the upcoming solicitation was to improve operational efficiency, maximize customer service, and provide fair opportunity. Ms. Favors stated there were nine dedicated service sites with maintenance, car wash, and gas pumps that inhabited 75 acres. She noted each site had a dedicated ramp to the garage and each level had a ramp with dedicated escalators from the customer service building to the garage facility. Ms. Favors stated the concession contracts with operators had terms of 10 years and that the facility leases had terms of 20 years with an automatic termination if the operator did not receive a new concession contract after the first 10-year period. Ms. Favors stated the Small Operator Parcel (SOP) was a month to month term where operators shared a service site, customer retail area, and allocated garage space. Ms. Favors stated industry consolidations have changed the organization of operators since the RCC was opened. Ms. Favors stated Avis Budget bought Payless and ZipCar, Enterprise Holdings bought National and Alamo, and Hertz Corporation bought Dollar Thrifty and Firefly. She noted the consolidations impacted the operations at the RCC. Ms. Favors stated airports had to evaluate the RCC facilities in order to provide for expansion and growth. Ms. Favors stated consolidation created tier one brand families and tier two smaller independent companies. She noted tier one companies were divided into premium, value, and economy categories. Ms. Favors stated PHX currently hosted 14 on-airport rental car brands, owned and operated by only six companies due to consolidation. Ms. Favors stated Silver Car operates off-airport. Ms. Favors stated several considerations in the upcoming RFP including facility reconfiguration, contracts with individual brands, contracts with brand families, the necessity of the small operator parcel, and the use of customer facility charge (CFC) funds for capital costs.

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Ms. Favors stated Leigh Fisher was helping with the RFP development. She noted they had experience in developing rebid processes at other consolidated rental car facilities in San Francisco and Denver and that they were familiar with the unique challenges at PHX RCC. Ms. Favors stated the Aviation Department met with rental car industry leaders over the past year to establish and reach agreement on the goals and approach to the solicitation. Ms. Favors stated Aviation wanted to improve operational efficiency to maximize the Industry’s ability to serve customers, extend the useful life of the RCC facility, provide fair opportunity, regardless of company size, and optimize revenue. Ms. Favors stated there were many best practices gained from other airport rebid processes that would be utilized in this process to include direct negotiation, limiting rebid to ready return garage spaces, grandfathering Quick Turn-Around (QTA) sites and customer service retail areas, and offering a two-tier process for qualified operators. Ms. Favors stated that right sizing was important as well as an understanding of the effects of consolidation on operational areas. Ms. Favors stated Aviation established parameters for three lease areas in the RCC for tier one operators and determined the SOP area to optimally accommodate three independent operators. Ms. Favors displayed graphs to show the facility capacity for the customer service retail area. She stated the area was 39,239 square feet and by 2030, it would need to expand to 40,900 square feet. Ms. Favors stated Hertz had 35 percent of the space and only needed 33 percent, while Enterprise only had 24 percent and needed 30 percent. Mr. Cohn asked how many square feet those percentages translated into. Ms. Favors stated 39,000 square feet would be adequate for the 25 million enplaned passengers forecast for 2025. Ms. Favors displayed a graph to show the ready return garage spaces. She stated almost two million square feet would be adequate through 2025, but the space was available on the wrong levels due to dedicated garage ramps. Ms. Favors stated the SOP space was inadequate for today’s market share. Ms. Favors displayed a graph that showed the facility capacity for the QTA service site. She mentioned the site took up 75 acres and would be sufficient at a 10 year planning forecast.

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Ms. Favors stated by 2030, the QTA service sites would need 82 acres. She continued the sites would need 91 acres to meet the planning forecast for 2035. Ms. Favors stated the Aviation Department was working with stakeholders to ensure a smooth transition during the RFP process. Chairwoman Kim asked if the Board would receive additional updates. Ms. Favor stated yes, there would be periodical updates. Mr. Jones asked if there were any capacity constraints. Ms. Favors stated the RCC was limited by the size of the site; however, no operators would be shut out because of the off-airport option. Item 11 – Airport Noise Update Chairwoman Kim stated this item was added to the agenda to make the Board aware of any airspace, flight path, or noise changes. Mr. Cohn left the meeting. Assistant Aviation Director Deborah Ostreicher stated she was going to cover changes to airspace and flight path. Ms. Ostreicher stated the Department was working very hard to monitor changes to airspace and that an offer for the Deputy Aviation Director of Planning and Environmental had been made and accepted. Ms. Ostreicher stated the Marine Corps would be arriving in September and would visit schools for recruiting. She noted the Marines would also fly in formation on September 11 over the national cemetery and a few days later over the Cardinals stadium. Ms. Ostreicher stated the Marine events could create a potential noise impact and noted Aviation was working with the Marine Corps to make sure the community was notified. Ms. Ostreicher stated one of the runways at Phoenix Mesa Gateway Airport was temporarily out of service and Sky Harbor would be helping with traffic flow on days of severe weather. Ms. Ostreicher stated student pilots from Phoenix Mesa Gateway Airport requested to fly into Sky Harbor to practice landing. She continued the request was denied. Ms. Ostreicher stated the City of Phoenix imposed height restrictions to prohibit future construction from creating safety hazards for aircraft.

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Ms. Ostreicher displayed a map indicating potential construction hazards in neighboring cities with no height restrictions. She continued Aviation staff closely monitored all neighboring construction. Ms. Ostreicher displayed a picture that showed the website for the Federal Aviation Administration (FAA) Instrument Flight Procedures Information Gateway (IFP) and called attention to the eight proposed changes to assist with noise. She continued the proposed changes were not significant enough to reduce the hardship experienced by Phoenix residents as a result of flight path changes. Assistant Aviation Director Chad Makovsky stated the Aviation Department continued to monitor Deer Valley and Goodyear Airports that currently have minimal noise or airspace impact. Item 12 – Advisory Board Information and Follow-Up Requests None. Item 13 – Call to the Public None. Item 14 – Adjournment Ms. Cherny motioned for adjournment. Mr. Gorraiz seconded the motion. The motion was approved 8:0 and the meeting adjourned at 4:40 p.m.

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PHOENIX AVIATION ADVISORY BOARD REPORT To: Phoenix Aviation Advisory Board From: Paul Blue

Interim Aviation Director Subject: New Corporate Hangar Lease Agreement with State of Arizona Department

of Public Safety (DPS) The Aviation Department requests the Phoenix Aviation Advisory Board’s recommendation to Phoenix City Council to enter into a new Corporate Hangar Lease Agreement with the State of Arizona Department of Public Safety (DPS). BACKGROUND The State of Arizona Department of Public Safety (DPS) currently occupies an 8,500 square foot corporate hangar facility at 2505 East Air Lane at Phoenix Sky Harbor International Airport under a Temporary License Agreement (Agreement). The Agreement will expire on January 30, 2016. DPS would like to continue their tenancy in this hangar on a long term basis, to attain a return on investment for their proposed $135,000 capital improvement project to the hangar. Of that amount, an estimated $60,000 will be used to specifically resurface and epoxy the hangar floor area. Aviation has agreed to reduce the rental rate for the first three lease years, for an estimated $58,000 in reduced rent, in consideration of the hangar floor improvement specifically. Additional work under this capital improvement project will include the installation of new ceiling tiles, carpet and office area wall partitions, additional security features, interior painting, and new telecommunication and electrical connections. DISCUSSION The lease agreement will contain the following business terms and conditions subject to City Council approval:

1. Lease term is ten (10) years. 2. Annual rent for the first three Lease years is $72,250 or $8.50 per square foot per

year, based on a market rent study. 3. Rent credits in the amount of $2.00 per square foot will be issued in each of the

first three Lease years, resulting in a total annual rent of $55,250 or $6.50 per square foot per year.

4. After the third Lease year, the rent will return to $8.50 per square foot and will be adjusted in the fourth Lease year and each year thereafter in accordance with Consumer Price Index or 3%, whichever is greater.

5. Lease may contain other terms and conditions as deemed necessary or appropriate by the Aviation Director on behalf of the City.

RECOMMENDATION

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The Aviation Department requests the Phoenix Aviation Advisory Board’s recommendation to Phoenix City Council to enter into a new corporate hangar lease agreement with the State of Arizona Department of Public Safety at Phoenix Sky Harbor International Airport.

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PHOENIX AVIATION ADVISORY BOARD REPORT

To: Phoenix Aviation Advisory Board From: Paul Blue

Interim Aviation Director Subject: New Unsubordinated Ground Lease with AeroTurbine, Inc. The Aviation Department requests the Phoenix Aviation Advisory Board’s recommendation to the Phoenix City Council to enter into a new Unsubordinated Ground Lease (Lease) with AeroTurbine, Inc. (AeroTurbine) at Phoenix Goodyear Airport (GYR). BACKGROUND AeroTurbine performs maintenance, repair and overhaul modification services on commercial aircraft including disassembly and recycling of aircraft that have been removed from service operations. These services are conducted from a facility at GYR, known as Hangar 52, under Lease Agreement No. 75812 with AeroTurbine. Additionally, AeroTurbine occupies and leases an adjacent facility, known as Hangar 18, for aircraft part storage, shop and support office operations under Facility Lease Agreement no.136123. AeroTurbine’s business operations continue to grow at GYR. To accommodate its expansion, AeroTurbine desires to lease additional land on the north side of the GYR airfield to construct an additional aircraft disassembly area. Aviation and AeroTurbine have agreed to terms for a new unsubordinated ground lease for the expansion area. DISCUSSION The lease will contain the following business terms and conditions subject to City Council approval:

1. The leased premises will consist of approximately 78,000 square feet of unimproved land.

2. The lease term will commence on or about October 1, 2015. 3. The lease termination date will run congruent with Lease Agreement No. 75812

which will expire on June 27, 2026. There are no renewal options. 4. The lease rental rate will be at $0.15 per square foot per year ($11,700 Lease

Year 1). 5. Rent will be adjusted each year thereafter annually in accordance with Consumer

Price Index. 6. Permitted use of the property is limited to the disassembly of aircraft, including

removal of engines, capping of lines, and draining of residual fluids into secured containers. Draining of excessive amounts of fluids of any kind shall not be allowed.

7. AeroTurbine will be responsible for costs of any tenant improvements and maintenance of its improvements.

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8. Lease may contain other terms and conditions as deemed necessary or appropriate by the Aviation Director on behalf of the City.

RECOMMENDATION The Aviation Department requests the Phoenix Aviation Advisory Board’s recommendation to the Phoenix City Council to enter into a new unsubordinated ground lease with AeroTurbine, Inc. for additional square footage at Phoenix Goodyear Airport.

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PHOENIX AVIATION ADVISORY BOARD REPORT

To: Phoenix Aviation Advisory Board From: Paul Blue

Interim Aviation Director Subject: Arizona State Lottery Airport Retail Store The purpose of this report is to provide the Phoenix Aviation Advisory Board an update on discussions with Arizona State Lottery (Lottery) on establishing a state-operated lottery retail store at Phoenix Sky Harbor International Airport (PHX). BACKGROUND Since 2004, Arizona State Lottery officials and the Aviation Department have explored leasing terminal locations for a state-operated lottery retail store. Lottery staffing requirements, funding levels, and technology have thus far prevented executing a lease agreement. Recently, the Arizona State Lottery and the Aviation Department resumed discussion on establishing a state-operated lottery store at PHX. Lottery staff has been encouraged by the sales success of other state-operated lotteries in airports and view an airport lottery store as an optimal opportunity to maximize its revenue. Likewise, the Aviation Department recognizes that lottery products are not currently provided to passengers at PHX. Recent discussions have focused on terminal locations, leasing models, and other contract provisions for a long-term lottery store at PHX. In the interim, Lottery staff wish to install Instant Ticketing Vending Machines (ITVMs) in the proposed location while business terms of the long-term agreement are finalized. The Aviation Department is working with Lottery staff to execute a temporary license agreement for the ITVMs. DISCUSSION The Aviation Department will study peer airports with state-operated lottery stores, discuss next steps for a long-term agreement, and share information on the interim installation of ITVMs in Terminal 4. RECOMMENDATION This item is for information only.

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PHOENIX AVIATION ADVISORY BOARD REPORT

To: Phoenix Aviation Advisory Board From: Paul Blue

Interim Aviation Director Subject: Ground Transportation Update The purpose of this report is to provide the Phoenix Aviation Advisory Board a Ground Transportation Update for Phoenix Sky Harbor International Airport. BACKGROUND House Bill (HB) 2135 went into effect on July 10, 2015, providing the framework for Transportation Network Companies (TNCs), such as Uber and Lyft, to operate within the State of Arizona. The bill changed some of the existing requirements for Taxi and Livery vehicles, while adding requirements for TNCs. Provisions exist within the law that continue to allow public airports to set additional or more restrictive requirements for the conduct of Taxis, Livery and TNCs at a public airport. DISCUSSION Ground Transportation is evaluating HB2135 requirements in order to provide a consistent and competitive standard for commercial ground transportation companies including TNCs who operate in the pre-arranged category, Taxicab companies, and other Livery businesses provided they meet the permit requirements established in Phoenix City Code. These requirements include vehicle insurance, background checks and other company and driver requirements. The Operations Division is evaluating its current operating procedures along with new HB2135 requirements to identify potential customer service efficiencies while preserving safety standards and maintaining a level playing field for all ground transportation operators at PHX. Staff will provide the Board with an overview of current ground transportation operations, and provide an update on discussions with TNCs to ensure safe, compliant, and customer friendly operations at Sky Harbor Airport. RECOMMENDATION This item is for information only. No action required.

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PHOENIX AVIATION ADVISORY BOARD REPORT

To: Phoenix Aviation Advisory Board From: Paul Blue

Interim Aviation Director Subject: Airport Noise Update The purpose of this report is to provide the Phoenix Aviation Advisory Board an update on changes to valley airspace and airport operations that could potentially impact communities surrounding or operations at Phoenix Airports. BACKGROUND On September 18, 2014 the Federal Aviation Administration (FAA) implemented new flight departure procedures from Phoenix Sky Harbor International Airport, resulting in significant hardship to City of Phoenix residents living underneath the new flight paths. Although the Aviation Department cannot modify flight procedures or control airspace, it continues to advocate on behalf of the public to relieve noise burdens and resist future implementations that could negatively impact the public. DISCUSSION The Aviation Department is working to proactively track any changes to Valley airspace or airport operations by attending Phoenix Airspace User Working Group (PAUWG) meetings, reviewing FAA change notifications, and communicating with valley airports. The Aviation Department will provide an update to the Board on air operation changes or events and is committed to notifying the public using its website, e-mail list, and public meetings. The Aviation Department has also recently facilitated several community workshops on community noise issues. RECOMMENDATION This item is for information only.

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PHOENIX AVIATION ADVISORY BOARD REPORT

To: Phoenix Aviation Advisory Board From: Paul Blue

Interim Aviation Director Subject: New SkyHarbor.com Website The purpose of this report is to provide the Phoenix Aviation Advisory Board an update on the new SkyHarbor.com website that will be rolled out by the Aviation Department this fall. BACKGROUND SkyHarbor.com is getting a facelift. The current website is built on legacy technology and does not render well in all current browser types or on mobile devices. DISCUSSION The Aviation Department currently maintains two websites: www.skyharbor.com, which is designed for use on a full desktop computer, and m.skyharbor.com, designed specifically for use on mobile devices. The new website utilizes a “responsive design” technology that allows the same webpage to render correctly in any browser and on any device. The new website will simplify administration of site content and facilitate rapid content changes as well as the deployment of new features and functions. In addition to the new elegant design, the website has been revamped to make the most commonly used features easy to find and use. The new website makes it easy for the traveling public to access real-time flight information, parking facility availability and locations, as well as detailed terminal maps showing the locations of dining and shopping opportunities. RECOMMENDATION This item is for information only.

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