[FY 2024 Budget Workshop: Houston Airport System]
[00:00:20]
UH, TODAY'S BUDGET WORKSHOPS ARE THE HOUSTON AIRPORT SYSTEM PRESENTING AT NINE DEPARTMENT OF NEIGHBORHOODS AT 10 HOUSTON PARKS AND RECREATION AT 11, AND PLANNING AND DEVELOPING AT NOON.
ADDITIONALLY, THE BUDGET WORKSHOP SCHEDULE IS POSTED ON THE BFA WEBSITE.
ALL BUDGET AND FISCAL AFFAIRS COMMITTEE MEETINGS AND BUDGET WORKSHOPS ARE BROADCAST ON HTV THROUGH THE CITY'S MUNICIPAL CHANNEL.
IN ADDITION TO BEING STREAMED ON HTV FACEBOOK PAGE, SIGN UP FOR PUBLIC COMMENT WAS COMPLETED YESTERDAY AT THREE O'CLOCK.
PUBLIC SPEAKERS LIST HAS BEEN PROVIDED TO EACH COUNCIL MEMBER FOR TODAY'S PRESENTATION.
HOWEVER, IF THERE ARE ADDITIONAL MEMBERS OF THE PUBLIC THAT ARE HERE IN PERSON, DID NOT GET A CHANCE TO SIGN IN YESTERDAY, THERE'LL BE A SIGNUP SHEET AT THE FRONT TABLE.
MY STAFF ARI, RAISE YOUR HAND.
WE'LL BE MONITORING THE PUBLIC SPEAKER'S LIST.
THE MAIN PUBLIC HEARING ON THE FY 24 BUDGET IS EXPECTED TO OCCUR ON MENS WEDNESDAY, MAY 31ST.
AGAIN, THE MAIN PUBLIC HEARING ON THE FY 24 BUDGET IS EXPECTED TO OCCUR ON MAY 31ST DURING OUR REGULARLY SCHEDULED CITY COUNCIL MEETING AT NINE.
JUST A QUICK COUPLE OF OTHER HOUSEKEEPING KEEPING ITEMS. COUNCIL MEMBERS SHOULD SUBMIT ANY DEPARTMENT WORKSHOP QUESTIONS IN A WORD DOCUMENT AND UPLOAD IT TO SHAREPOINT BUDGET.
WORKSPACE DEPARTMENTS HAVE BEEN PROVIDED OR DIRECTED TO PROVIDE RESPONSES WITHIN 48 HOURS OF THE CONCLUSION OF THE PRESENTATION, EXCEPT FOR AIRPORT WHO WILL BE REQUIRED TO SUBMIT IT WITHIN ONE HOUR AFTER THE START OF THE WORKSHOP.
NO PROBLEM, RIGHT? I MEAN, WE'RE ALWAYS TALKING ABOUT TIMELY SERVICE RIGHT ON TIME DELIVERY.
SO, UH, IF QUESTIONS ARE SUBMITTED AFTER THE PRESENTATION DEPARTMENT, UH, PRESENTATIONS, UH, DEPARTMENTS HAVE 24 48 HOURS TO RESPOND VIA SHAREPOINT FROM TIME OF POSTING.
PUBLIC SPEAKERS SHOULD HAVE SIGNED UP BY THREE O'CLOCK YESTERDAY.
THE FYI 24 BUDGET AMENDMENT TEMPLATE HAS ALSO BEEN UPLOADED TO SHAREPOINT BUDGET WORKSPACE, AND MAYOR TURNER SENT A COUNCIL, UH, MEMO TO ALL COUNCIL MEMBERS AND COUNCIL OFFICES TO ENSURE THAT PRODUCTIVE DISCUSSIONS ON THE 24 BUDGET RELATED TO COUNCIL MEMBER AMENDMENTS PER HIS MEMO, POLICY AMENDMENTS SHOULD NOT BE SUBMITTED AND WILL BE RULED OUT OF ORDER.
PLEASE SEE THE MAYOR'S MEMO FOR ADDITIONAL GUIDANCE AMENDMENTS ARE DUE ON WEDNESDAY, MAY 31ST.
THIS TIME I'D LIKE TO WELCOME BEFORE I DO, I, WE ARE JOINED BY STAFF FROM MARYANNE HUFFMAN'S, OFFICE DISTRICT G AND CARLOS CISNEROS, OFFICE DISTRICT EIGHT.
THIS TIME I'D LIKE TO WELCOME DEPARTMENT OF AG AVIATION HOUSTON AIRPORT SYSTEM DIRECTOR, MR. MARIO DIAZ, AND CHIEF FINANCIAL OFFICER CLINT STEVEN TO PROVIDE THE HOUSTON AIRPORTS SYSTEM BUDGET.
MEMBERS OF COUNCIL, MEMBERS OF STAFF.
WE'RE HERE THIS MORNING TO PRESENT THE FISCAL YEAR 24 BUDGET FOR THE HOUSTON AIRPORT SYSTEM.
JOINING ME THIS MORNING IS, UH, THE CHAIR HAS SAID IS, UH, CLINT STEVENS OUR CHIEF FINANCIAL OFFICER, AND ALSO IN THE AUDIENCE IS, UM, JIM ESK, OUR CHIEF OPERATING OFFICER, AND GARY HIGH, OUR CHIEF DEVELOPMENT OFFICER.
AND, UH, WITHOUT ANY FURTHER DELAY, LET ME TURN IT OVER TO CLINT STEVENS, OUR CHIEF FINANCIAL OFFICER, TO ACTUALLY INTRODUCE HIS TEAM AND THEN CONTINUE ON WITH THE PRESENTATION.
UH, HAPPY TO BE HERE FOR MY FIRST, UH, COUNCIL VISIT, I'D LIKE TO INTRODUCE MY BUDGET TEAM.
I HAVE FARUK AND CHERYL, ANA MO DERA, DARCY.
AND THEN OF COURSE YOU GUYS KNOW KISHA FROM LAST YEAR'S BUDGET PRESENTATION.
I'M HAPPY TO HAVE THEM HERE AND, UM, I'M HAPPY THEY SUPPORTED ME A LOT IN THE DEVELOPMENT OF, UH, THIS PARTICULAR BUDGET.
SO LET'S DIVE INTO THE PROPOSED BUDGET FOR FISCAL YEAR 2024 FOR THE DEPARTMENT OF AVIATION.
BRIEFLY, LET'S, UH, COVER, UH, LET'S DO A BRIEF OVERVIEW OF WHAT WE'LL COVER.
WE'LL START WITH THE ORGANIZATION, THEN WE'LL UPDATE SOME OF OUR ACCOMPLISHMENTS IN THE PAST FISCAL YEAR, AND THEN WE'LL MOVE ON TO DETAILS OF THE PROPOSED BUDGET.
THE DEPARTMENT IS HEADED UP BY DIRECTOR OF AVIATION, MARIO DIAZ, WHO, WHO SITS HERE IN SUPPORT, AND HE IS SUPPORTED BY THE CHIEF OPERATING OFFICER, JIM SNYK AND THE CHIEF TERMINAL MANAGEMENT AND ADMINISTRATIVE SERVICES OFFICER, LILIANA RAMBO.
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THAT INCLUDES FINANCE AND ACCOUNTING UNDER BY WATCH, COMMERCIAL DEVELOPMENT LED BY FRANCISCO CUELLAR INFRASTRUCTURE LED BY GARY HIGH TECHNOLOGY UNDER DARYL DANIEL, MARKETING AIR SERVICE DEVELOPMENT AND COMMUNICATIONS, LED BY MOLLY WAITS AIRPORT OPERATIONS UNDER STEVE RUNGE ELLINGTON AIRPORT AND SPACEPORT, LED BY BY ARTURO MACHUCA AVIATION RISK AND REGULATORY COMPLIANCE LED BY JOCELYN LEBO AND EXTERNAL AFFAIRS UNDER THE LEADERSHIP OF SABA ABHA THIS YEAR.THIS YEAR, HAS WAS RECOGNIZED AT THE SKYRAS WORLD AIR AIRPORT AWARDS AS THE FIRST EVER RECIPIENT OF THE WORLD'S BEST ART IN AIRPORT AWARD.
THIS IS A HISTORIC WIN FOR THE CITY, ITS AIRPORTS AND THE COMMERCIAL AVIATION INDUSTRY.
THIS AWARD REC RECOGNIZES THE ACCOMPLISHMENTS IN BOTH THE VISUAL AND PERFORMING ARTS.
ABBY AIRPORT ALSO MAINTAINED ITS STATUS AS A SKY TRACKS FIVE STAR AIRPORT FOR THE SECOND CONSECUTIVE YEAR.
THIS STATUS AS THE ONLY FIVE STAR AIRPORT IN NORTH AMERICA AND ONLY ONE OF 18 IN THE WORLD WAS DETERMINED BY INTERNATIONAL AIR TRANSPORT RATING AGENCY SKY TRACKS HOBBY WAS ALSO SELECTED BY PASSENGERS TO BE THE MOST ENJOYABLE AIRPORT IN NORTH AMERICA.
IN THE SURVEY BY THE AIRPORT'S COUNCIL INTERNATIONAL NEXT SLIDE, PLEASE.
THE PORT CONTINUES TO GROW AND DEVELOP.
COLLINS AEROSPACE HAS OPENED THEIR CAMPUS AT THE SPACE PORT AND WILL HOST HOUSTON'S FIRST SPACE FLIGHT INCUBATOR.
INTUITIVE MACHINES CONTINUES TO DEVELOP THEIR 12.5 ACRE PLOT WHILE SIMULTANEOUSLY, AND THIS IS COOL, TESTING ROCKETS AT THE AIRPORT AND DEVELOPING THEIR LUNAR LANDER FOR ITS UPCOMING MISSION.
AXIOM IS ALSO WELL INTO DEVELOPMENT OF THEIR CAMPUS, WHICH INCLUDE ASTRONAUT TRAINING AND MISSION CONTROL FACILITIES, LABS, ENGINEERING, AND PRODUCTION FACILITIES FOR THE CONSTRUCTION OF SPACE STATION MODULES SOON TO BE LIFTED INTO SPACE.
PLEASE PROGRESS ON THE REDEVELOPMENT OF THE INTERNATIONAL FACILITIES.
AT IAH, ALSO KNOWN AS I, TRIPP CONTINUES THE TERMINAL D WEST PIER AND ITS ADDITIONAL GATES FOR INTERNATIONAL FLIGHTS IS EXPECTED TO OPEN BY THE END OF THIS CALENDAR YEAR.
THE INTERNATIONAL CENTRAL PROCESSOR IS SCHEDULED TO OPEN BY THE BEGINNING OF CALENDAR YEAR 2025.
HOBBY IS ALSO EXPANDING TO ADD CAPACITY.
SOUTHWEST AIRLINES IS IN THE DESIGN STAGE FOR A SEVEN GATE EXPANSION OF THE WEST PIER AT THE AIRPORT.
IN THE SCHEMATIC DISPLAYED, THE NEW GATES ARE ON THE LEFT SIDE OF THE, OF THE SKE SCHEMATIC WITH FOUR ON THE NORTH SIDE OF THE EXPANSION AND THREE ON THE SOUTH.
CONSTRUCTION IS EXPECTED TO BEGIN IN LATE 2023 OR EARLY 2024.
HOUSTON AIRPORT SYSTEM CONTINUES TO CONNECT HOUSTON TO THE WORLD WITH PARTNER AIRLINES FLYING TO 180 CITIES IN 35 COUNTRIES.
OUR STRATEGIC PLAN REMAINS AT THE CORE OF HOW WE DO BUSINESS.
OUR MISSION IS TO CONNECT THE PEOPLE, BUSINESSES, AND CULTURES AND ECONOMIES OF THE WORLD TO HOUSTON.
AND OUR VISION IS TO ESTABLISH HOUSTON AIRPORT SYSTEM AS A FIVE STAR GLOBAL AIR SERVICE GATEWAY WHERE THE MAGIC OF FLIGHT IS CELEBRATED.
OUR PRIORITIES REMAIN TO MAKE OUR PASSENGERS HAPPY, ACT RESPONSIBLY TO ACHIEVE SOCIAL, ENVIRONMENTAL, AND ECONOMIC SUSTAINABILITY, BUILD PLATFORMS FOR FUTURE SUCCESS, AND INVEST IN OUR PARTNERSHIPS AND OUR EMPLOYEES.
NOW LET'S START TO TAKE A MORE DETAILED LOOK AT OUR PLAN FOR THE UPCOMING FISCAL YEAR, STARTING WITH, IN PLACEMENTS FISCAL YEAR 2023, ESTIMATED IN EMPLOYMENTS ARE SLIGHTLY BELOW THE BUDGETED NUMBERS, PRIMARILY DUE TO AIRLINE PERFORMANCE AND COMPLETION ISSUES DURING THE HOLIDAY SEASON.
SOME OF THE PROBLEMS WERE RELATED TO WEATHER AND OTHERS
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WERE RELATED TO AIRLINE.IT ISSUES FY 2024 AND CLAIMANTS ARE BUDGETED TO INCREASE 2% AND REACH 99.3% OF THE FISCAL YEAR 2019 ACTUALS IN A RETURN TO NEAR PRE COVID LEVELS.
HOWEVER, RECENT DEVELOPMENTS WITH AIR CANADA SPIRIT AND UNITED AND SOME SHORT TERM ACCELERATION IN OUR UNEMPLOYMENTS MAY INDICATE THAT THESE NUMBERS ARE CONSERVATIVE AS THE ILLUSTRATION.
ON AS THE ILLUSTRATION BASED ON AIRLINE PROJECTIONS IN OUR OWN OBSERVATIONS IN MAY, WE ARE OPTIMISTIC THAT IN PLACEMENTS WILL BE STRONG FOR THE SUMMER OF TRAVEL SEASON AS DEMONSTRATED IN THIS CHART.
BASED ON BUDGET PROJECTIONS, WE EXPECT TO APPROACH 2019 IN PLAN LEVELS NEXT YEAR AND SURPASS THEM IN 2025.
AS I MENTIONED, RECENT TRENDS GIVE US REASON FOR SOME OPTIMISM, AND WE LOOK FORWARD IN UPCOMING UPDATES IN AIRLINE PROJECTIONS.
OVERALL, WE EXPECT A 6.5% INCREASE IN REVENUE FOR FISCAL YEAR 2024 OVER THE ESTIMATED FINAL REVENUE FOR FISCAL YEAR 2023 OF 555 MILLION.
AND THAT WAS VERSUS A 2023 BUDGET OF 517 MILLION.
THE 2024 INCREASE CONSISTS OF AN 11.7% INCREASE IN AIRLINE REVENUES, INCLUDING LANDING FEES, TERMINAL RENTS AND USAGE FEES, AND A 1.1% INCREASE IN NON-AIR AIRLINE REVENUE, GROUND TRANSPORTATION AND RETAIL CONCESSIONS AND AUTO RENTALS SHOW A SLIGHT YEAR OVER YEAR DECREASE.
THE RETAIL CONCESSIONS NUMBER IS A LITTLE CONSERVATIVE BASED ON THE TRANSITION TO A NEW PROVIDER AT THE HOBBY AIRPORT AND A RAMP UP PERIOD.
AUTO RENTAL WAS BUDGETED BASED ON TRENDING DATA AT THE TIME OF THE BUDGET PREP.
AND RECENT ACTUALS HAVE COME IN SLIGHTLY STRONGER THAN THE BASELINE USED FOR THE BUDGET.
SO WE HAVE SOME REASON FOR LITTLE OPTIMISM THERE.
AIRLINE REVENUES FROM LANDING FEES AND TERMINAL RENTS ARE PROJECTED TO INCREASE BY $33 MILLION DUE TO ADDITIONAL COST RECOVERY AND AIRLINES UTILIZING LARGER AIRCRAFT TO ACCOMMODATE HIGHER END S.
PARKING IS A MAJOR CONTRIBUTOR IN OUR NON-AIR AIRLINE REVENUE INCREASING THREE POINT A HALF MILLION OR 3.1% RESULTING FROM PASSENGER TRAFFIC INCREASES REVENUE FROM FACILITY RENTALS AND OTHER MIS MISCELLANEOUS REVENUE ARE PROJECTED TO INCREASE 2.7 MILLION.
AND THAT'S PRIMARILY DUE TO INCREASED FACILITY RENTS RECEIVED AS THE SPACEPORT PROJECTS ARE COMPLETED AND COME ONLINE.
MOVING ON TO EXPENDITURES, OVERALL EXPENDITURES IN 8,001 ARE EXPECTED TO INCREASE 6.4% OVER THE ESTIMATED FINAL FOR FISCAL YEAR 2023.
PERSONNEL IS EXPECTED TO INCREASE $6 MILLION OR 4.9%.
SUPPLIES ARE EXPECTED TO INCREASE $1.3 MILLION, $1.4 MILLION OR 18.7% CONTRACTED SERVICES AND AND CHARGES ARE EXPECTED TO INCREASE ALMOST 22 MILLION OR 11.8%.
AND NON-CAPITAL OUTLAYS ARE EXPECTED TO INCREASE JUST UNDER 700,000 OR 32%.
DEBT SERVICE AND OTHER USES SHOWS A SLIGHT INCREASE FOR AN OVERALL INCREASE IN M AND O 8,001 OF 6.4%.
CAPITAL OUTLAYS IN 8 80 12 ARE EXPECTED TO INCREASE DRAMATICALLY AT 831%.
THIS IS PRIMARILY DUE TO SUPPLY CHAIN DISRUPTIONS, DELAYING DELIVERIES IN PRIOR PERIODS, PRIMARILY RELATED TO ROLLING STOCK.
I'LL SHARE SOME ADDITIONAL INFORMATION ON THAT IN THE NEXT COUPLE OF SLIDES.
SUPPLIES AND EQUIPMENT INCLUDE INCREASED VOLUME AS THE TERMINAL D WEST PIER OPENS, AND WE ARE EXPERIENCING INFLATIONARY PRESSURES ACROSS THE ENTERPRISE.
CONTRACTED SERVICES DEMONSTRATE THE IMPACT OF INFLATIONARY PRESSURES AND OTHER INCREASES FOR A LIVING WAGE IMPACT ON SOME SECURITY SERVICES, INCREASED CREDIT CARD TRANSACTION PROCESSING FEES,
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IT, LICENSING AND USER FEES, ENVIRONMENTAL ENERGY AND RESILIENCY STUDIES, AND ELEVATOR AND CONVEYANCE MAINTENANCE FEES.UM, WE HAVE ACROSS THE BOARD INCREASES, UH, PRICE INCREASE PRESSURES ON THESE CONSULTING SERVICES AND, AND IT INCLUDES CONCESSION MARKETING, FINANCE SUPPORT, FACILITY OPEN AND TRANSITION OPENING AND TRANSITION FOR THE WEST BUREAU.
ALSO, INTER FUND INCREASES TO THE GENERAL FUND ARE INCREASING $13.5 MILLION OR 13.2% TO 117.5 MILLION.
THE LARGEST INCREASES CONTAINED IN THE INTER FUND ARE UTILITIES AT 2 MILLION AND INSURANCE AT ALMOST 4 MILLION.
ONE OUT OF EVERY $3 SPENT ON M AND O BY HAS FLOWS TO THE CITY THROUGH THE ENTER FUND.
AS I SAID, I'D SHARE A LITTLE MORE DETAIL ON THE 80 12.
DUE TO SUPPLY CHAIN DISRUPTIONS AND DELAYED DELIVERIES OF ROLLING STOCK.
THERE'S, UH, FOR FUND 80 12 HAS WILL APPROPRIATE $12.6 MILLION IN FY 2024, AND THE REMAINING 22.3 MILLION IS CARRIED FORWARD FROM PRIOR PERIODS WHERE WE DID NOT RECEIVE THE DELIVERIES OF ROLLING STOCK.
THIS IS A NEW SLIDE IT SLIDE PUTS, PULLS TOGETHER A LITTLE MORE COMPLETE PICTURE OF THE TOTAL EXPECTED FINANCIALS AT HAS FOR 2024.
STARTING AT THE TOP, WE RECOGNIZE THE AIRLINE AND NON AIRLINE REVENUE AT 591,000,441 FOR THE YEAR.
OUR OPERATING IN MAINTENANCE EXPENSE AT 354,000,531, LEAVING NET OPERATING REVENUE OF $237 MILLION.
ADD TO THAT INTEREST AND NON-OPERATING REVENUE OF 12 MILLION, LESS INTEREST EXPENSE OF 400,000.
AND THEN THE EXPECTED PASSENGER FACILITY CHARGE COLLECTED AT 102.3 MILLION.
THE REMAINDER OF OUR CARES KRISA AND ARPA GRANTS, PLUS THE CONCESSION COMPONENT OF THOSE GRANTS.
A IP GRANTS THE BIPARTISAN INFRASTRUCTURE LAW, A-I-G-A-T-P GRANTS AND OTHER, AND WE SHOW A A NET NON-OPERATING OR TOTAL REVENUE OF $278 MILLION.
SO WE SHOW IN COMBINATION THAT GIVES US REVENUE BEFORE DEBT SERVICE AND TRANSFERS OF $515,124,000.
IF YOU SUBTRACT OUR TOTAL DEBT SERVICE REQUIREMENTS, YOU COME TO REVENUE AVAILABLE FOR CAP, UH, CAPEX AND INVESTMENT OF $286.8 MILLION.
THIS IS THE BREAKDOWN OF THE PERSONNEL VERSUS NON-PERSONNEL IN 8,001, PERSONNEL AT $134 MILLION SUPPLIES AT JUST UNDER NINE SERVICES AT NEARLY $209 MILLION AND NON-CAPITAL AT $2.9 MILLION.
BRINGS US TO THE TOTAL OF 354 MILLION.
THE NON-PERSONNEL COMPONENT CONSISTS OF THE RESTRICTED ACCOUNTS OF 117 MILLION SUPPLIES OF ALMOST 9 MILLION SERVICES OF 91.6 MILLION AND NON-CAPITAL REMAINING AT 2.9 MILLION FOR NON PERSONNEL TOTAL EXPENDITURES OF 220,316,000.
PLEASE FUND 80 12 PERSONNEL VERSUS NON PERSONNEL.
THAT'S JUST A BREAKDOWN OF THE, UM, SPENDING IN 80 12 SHOWS VEHICLES ROLLING STOCK AT 94% COMPUTER HARDWARE AND SOFTWARE AT $1.3 MILLION OR 4% BUILDING IMPROVEMENT IN FF AND E AT $681,000 OR JUST 2%.
WE'VE BEEN JOINED BY COUNCIL MEMBER SALLY ALCORN AND STAFF FROM COUNCIL MEMBER TIFFANY THOMAS.
FIRST QUESTION COMES FROM COUNCIL MEMBER SALLY ALCORN.
THANK YOU CHAIR, AND THANKS FOR THE PRESENTATION.
IT'S SO FUN TO DO THE AIRPORTS.
THERE'S SO MUCH MONEY HERE,
THERE'S LIKE $286 MILLION LEFT TO SPEND ON STUFF.
YEAH, I MEAN THAT NEVER HAPPENS IN ANY OTHER DEPARTMENT, SO THAT'S GREAT.
REMIND ME WHAT THE PASSENGER FACILITY CHARGE IS.
IS IT THE MAX OR NO, IT, THE PASSENGER FACILITY CHARGE.
I MEAN, I KNOW WHAT IT IS, BUT HOW
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MUCH IS IT? HOW MUCH? IT'S FOUR 50.WHAT'S TWO 50 CENTS? UH, LESS ADMINISTRATIVE CHARGE THAT WE PAY TO THE AIRLINES FOR COLLECTING IT.
IT'S ABOUT AN 8% CHARGE THAT WE, WE GIVE BACK TO THE AIRLINES FOR COLLECTING IT IN.
WE RAISED IT WHEN, A COUPLE YEARS, FEW YEARS AGO.
I THINK WE WERE COLLECTING AT $3 WHEN WE WENT TO FOUR 50.
I THINK IT WAS IN 20 13, 20 14.
AND, UM, ON THE ROLLING STOCK, THE, THE CARRYOVER, IS THAT JUST ALL VEHICLES? I MEAN, IS THAT WHAT YOU'RE TALKING ABOUT? IT'S HOW MANY VEHICLES ARE AT THE AIRPORT? I MEAN, WHAT KIND OF ROLLING STOCK SITUATION IS IT? IT INCLUDES FIREFIGHTING VEHICLES.
IT INCLUDES, UH, AIRFIELD, UH, OPERATIONS VEHICLES, UH, PICKUP TRUCKS.
IT ALSO INCLUDES AN ELECTRICAL, UM, HEAVY DUTY MAINTENANCE TRUCK.
AND ARE, AND DO YOU GUYS, UM, TAKE CHARGE OF YOUR OWN FLEET OR IS IT MANAGED BY OUR FLEET? IT'S MANAGED BY THE CITY.
WE PURCHASED THE VEHICLES THROUGH SPD, BUT THEY ARE MAINTAINED BY, UH, FLEET MANAGEMENT.
SO FLEET MANAGEMENT DOES TAKE CARE OF YOURS.
FOR ME, THE AIRPORT'S ALWAYS, UM, SORT OF AN ENIGMA.
AND THE REASON WHY IS IT'S NOT THE GENERAL FUND, IT'S THE ENTERPRISE FUND AND WE REALLY DON'T HAVE A LOT OF FOCUS ON IT.
SO WHEN I GET THESE REPORTS, IT'S THE ONLY TIME THAT WE HAVE A REPORT THAT ANALYZES THE REVENUE AND EXPENSES OF THE AIRPORT.
AND LOOKING AT FUND 88 0 1, IT ALMOST LOOKS LIKE YOU OPERATE SIMILAR TO A 5 0 1 C3 WHERE YOUR EXPENSES MATCH THE REVENUE.
IS THAT AN ANOMALY OR DOES THAT HAPPEN EVERY YEAR? SO THE REQUIREMENT OF THE CITY IS REVENUES, EXPENSES, REVENUES MUST MATCH EXPENSES.
SO WE DO IN THE LINE ITEM DEBT SERVICE AND OTHER, THE OTHER IS THE NET REVENUE OR THE NET INCOME AFTER A PAYMENT OF DEBT SERVICE.
AND WE JUST SHOW IT AS A COMBINED NUMBER.
IS THAT CITY RELATED OR IS THAT FAA RELATED OR HOW IS IT IT'S CITY RELATED.
IT'S JUST THE WAY THAT THE CITY ASK FOR THE INFORMATION TO PRESENT.
BECAUSE WHEN YOU LOOK AT IT AS COMES, MEMBER ALCORN SAID, YOU KNOW, THE FINANCIALS FOR THE AIRPORT ARE ALWAYS REALLY, REALLY GOOD.
WELL, AND OF COURSE I'M SURE IF I WAS MAYOR OF THE CITY, I WOULD WANT TO TO GRAB THAT 8 280 $6 MILLION AND USE IT FOR OTHER THINGS.
BUT WE CAN'T BECAUSE IT, IT'S, WE'RE REQUIRED BY FAA TO MAINTAIN THE, THE BOOKS THE WAY WE DO.
UH, SO IT'S ALWAYS INTRIGUING WHEN YOU LOOK AT THESE NUMBERS AND YOU GO, MAN, WHAT A GREAT BUSINESS TO BE IN.
I LOVE WHAT'S HAPPENING IN THAT SPACEPORT.
I MEAN, WE HAVE SO MANY OPPORTUNITIES.
ALWAYS TELL PEOPLE THAT AS A CITY OF HOUSTON WAS BUILT ON ENERGY, PREDOMINANTLY OIL AND GAS, WE'RE TRANSITIONING AS A CITY OVER PROBABLY THE NEXT 5, 10, 15, 20 YEARS.
AND I THINK SOME OF THE INDUSTRIES THAT ARE GONNA COME IN, UH, FRONT AND CENTER ARE GONNA BE AVIATION AND AERONAUTICS, ESPECIALLY WHEN YOU LOOK AT WHAT SPACEPORT AND THINGS THAT ARE HAPPENING DOWN THERE.
AND, UH, AND ALSO THE THE MEDICAL SIDE, WHICH WE'RE FINALLY CAPITALIZING ON THE LARGEST GLOBAL MEDICAL CENTER BY DOING THE TM C3 PROJECT AND ALL THE THINGS RELATED TO R AND D AND ROBOTICS AND ALL THE THINGS RELATED WITH MEDICINE THAT WE NEVER TOUCH.
SO GIVE ME, I'VE ALWAYS BEEN EXCITED TO HEAR YOU TALK DIRECTOR DIAZ, WHEN YOU TALK ABOUT SPACEPORT.
'CAUSE YOU GET, UH, OVERLY EXCITED LIKE I DO.
SO, YOU KNOW, AS, AS I GET OUTTA HERE FOR THE NEXT, IN, IN LITERALLY SEVEN MONTHS, EIGHT MONTHS, UH, WHAT CAN WE INSPECT? WHAT CAN WE EXPECT DOWN THERE AND HOW THAT THING IS GOING TO TRANSITION INTO SOMETHING THAT WE CAN'T ENVISION? BECAUSE I VIVIDLY REMEMBER MOVING HERE IN, UH, 1990 AND HOBBY WAS THIS LITTLE BITTY SLEEPY AIRPORT SITTING DOWN SOUTH.
AND, UM, SO WHERE DO YOU SEE US MOVING WITH SPACEPORT AND SOME OF THE THINGS THAT WE SHOULD DO AS A CITY TO CAPITALIZE ON THAT MARKET THAT'S GROWING LEAPS AND BOUNDS? SO IT'S, IT'S A GREAT QUESTION.
AND, UM, THE SUCCESS THAT WE'VE HAD HAS NOT GONE UNNOTICED.
WE, UM, A LOT OF CITIES HAVE STARTED SPACE SPORTS JACKSONVILLE, FOR EXAMPLE, THEY'RE ON THE EAST COAST, BUT THEY HAVEN'T BEEN AS SUCCESSFUL.
A LOT OF PEOPLE SAY, WELL, WHAT, WHAT WAS IT THAT YOU DID OR, OR DOING THAT'S MADE THE DIFFERENCE? AND WE TOOK A PAGE FROM HUNTSVILLE.
HUNTSVILLE DOESN'T FLY ROCKETS.
HUNTSVILLE DOESN'T HAVE A SPACEPORT, BUT HUNTSVILLE IS THE ROCKET CITY OF THIS COUNTRY.
YOU TALK ABOUT ANCIENTS, YOU TALK ABOUT, YOU TALK ABOUT THE SATURN FIVES, YOU TALK ABOUT, YOU KNOW, THE DELTAS.
AND YOU CAN GO UP THERE AND YOU CAN SEE THEM THINGS BEING BUILT
[00:25:01]
THERE INTO SPACE IN A VERY, VERY DEEP WAY.AND WE CONSIDER WERE CALLING OURSELVES SPACE CITY.
UH, YEAH, WE, WE MANAGED SPACE FLIGHTS.
WE WERE, WE WERE THE CONTROL, UM, FOR BOTH, UM, MANNED AND UNMANNED FLIGHTS.
UM, JOHNSON, UH, UH, CENTER JOHNSON SPACE CENTER IN, IN, UM, CALIFORNIA FOR, UM, NON, UH, MAN OF MISSIONS.
BUT WE UNDERSTOOD THAT WHAT WE WERE LOOKING TO DO WAS NOT TO BECOME FAMOUS BY HAVING, BY LAUNCHING PEOPLE INTO SPACE.
WE WERE LOOKING TO DEVELOP AND ACT AS AN ECONOMIC DEVELOPMENT ENGINE FOR THE REGION, FOR THE CITY.
AND WE LOOKED AT ARLINGTON, WE SAID, SO WHAT DO WE DO WITH IT? AND WE JUST DECIDED TO CREATE AN INDUSTRIAL PARK.
BUT BASED ON WHAT, WHAT'S THE THEME? WHAT'S THE PURPOSE? WHAT, WHAT ARE WE LOOKING TO DO? AND YOU MAY RECALL THAT ONE OF THE VERY FIRST THINGS THAT WE ATTEMPTED TO DO WAS TO BRING, UM, UH, WHAT WAS THE, UH, THE SCHOOL EMRE RIDDLE.
WE TRIED TO GET A CAMPUS FROM EMRE RIDDLE, UH, THAT DIDN'T GO VERY WELL.
WE GOT CAUGHT INTO POLITICS IN WASHINGTON AND WE HAD TO LET THAT GO AWAY.
AND WE CAME BACK AND WE LOOKED AT, WELL, WHAT ARE WE DOING? AND YOU MAY RECALL, YOU PROBABLY RECALL, THERE WERE SIGNS BY A REAL ESTATE, UM, BROKERAGE FIRM THAT BASICALLY SAID, LEASE LAND AVAILABLE FOR LEASE.
WELL, THAT WASN'T GONNA GET IT.
AND SO WHAT WE DID WAS WE SAID, LET'S THINK ABOUT A THEME.
AND WE LOOKED AROUND AND WE SAID TO OURSELVES, WE'VE GOT THE JOHNSON SPACE CENTER, WE'VE GOT THE BOEING SEA LAB, WE HAVE ALL THESE, UM, COMPANIES THAT ARE INVESTED IN AEROSPACE IN THE CITY, THAT WE SHOULD DEVELOP A THEME AROUND AEROSPACE.
AND SO WE STARTED AND WE STARTED MARKETING IT.
WE, WE JOINED, HAD VERY GOOD PARTNERSHIP, CONTINUED TO THIS DAY TO HAVE A VERY GOOD PARTNERSHIP WITH RICE UNIVERSITY.
UM, AND WE STARTED DOING LECTURES AND WE WERE PROVIDING THE COCKTAILS AND BRINGING IN SCIENTISTS AND ENGINEERS.
AND BEFORE YOU KNOW IT, WE WERE STARTING TO GET RECOGNITION.
UM, WE STARTED TO DEVELOP, PUT IN THE INFRASTRUCTURE, AND WE GOT TO A POINT WHERE WE HAD, UM, A, A SEARCH FIRM, ACTUALLY IT'S A LOGISTICS FIRM THAT BRINGS IN COMPANIES.
AND WE MET WITH THEM SEVERAL TIMES AND HE SAID, YOU KNOW WHAT GUYS? YOU HAVE GOT TO STOP BRING TAKING CUSTOMERS THAT WE BRING TO YOU AND ASKING THEM TO LOOK THROUGH THE FENCE AND IMAGINE A SPACEPORT THAT AIN'T GONNA GET IT ANYMORE.
IT'S WEEDS THAT THEY SEE WEEDS, THEY DON'T SEE A SPACEPORT.
YOU GOTTA GET, YOU GOTTA GET REAL ABOUT THIS OR GET OUT OF THE GAME.
WE DREW UP PLANS FOR INFRASTRUCTURE FIRST, 150 ACRES.
WE MADE INVESTMENT IN A BRAND NEW AIR TRAFFIC CONTROL WITH THE CAPABILITY FOR SPACE FLIGHT.
AND WE SET ABOUT, AND WE STARTED DOING MORE AND MORE MARKETING.
AND BEFORE YOU KNEW IT, WE LANDED COLLINS AEROSPACE.
COLLINS AEROSPACE WAS, WAS FOLLOWED BY INTUITIVE MACHINES.
AND IF YOU HAVEN'T READ, THERE'S AN ARTICLE IN THE C NNN AND CNN AND, UH, THE CHRONICLE, UM, I THINK IT'S THIS WEEK OR LAST WEEK THAT SHOWS AXIOM IS NOW LAUNCHING THEIR FIRST FLIGHTS TO, AND I MEAN, YOU GOTTA HAVE A COUPLE OF DOLLARS TO DO IT.
SO THEY'RE, THEY'RE, THEY'RE STARTING WITH SAUDI, ARABIAN, SAUDI ARABIA AND SOME OF THE PEOPLE IN SAUDI ARABIA.
THEY HAVE SOME MONEY TO DO IT.
IT, IT'S NOT INEXPENSIVE RIGHT NOW, BUT THEY HAVE STARTED AND THEY'RE GOING TO START TO PROVIDE MORE, MORE ACCESS TO SPACE.
BUT IT WON'T BE THE, THE LAUNCHES THEMSELVES.
THOSE SATURDAY EIGHT ROCK SATURDAY, NINE ROCKETS WON'T BE LIFTING OFF FROM HOUSTON, BUT WE WILL BE MANUFACTURING THE STUFF THAT GOES INTO SPACE.
AND WE WILL BE, BECOME A COMPETITOR TO HUNTSVILLE IN EVERY WAY IN THE PRODUCTION OF THE POWER PLANTS AND THE FACILITIES AND THE ROCKETS AND THE ENGINES AND THE GUIDANCE SYSTEMS AND THE TRAINING SO THAT WE ONE DAY WILL STAND SHOULDER TO SHOULDERS WITH HUNTSVILLE.
AND THAT'S THE VISION FOR THE SPACEPORT.
SO I GET IN TROUBLE WHEN I TALK ABOUT HUNTSVILLE BECAUSE I GO REALLY HUNTSVILLE, ALABAMA.
IT SHOULD BE CALLED SHELBYVILLE BECAUSE THE ONLY REASON WHY EVERYTHING IS IN HUNTSVILLE IS BECAUSE OF SENATOR SHELBY NCES.
'CAUSE HE JAMMED EVERYTHING UP THERE TO THE DETRIMENT OF JOHNSON SPACE CENTER.
AND PEOPLE GET MAD AT ME WHEN I SAY, I CAN'T STAND HUNTSVILLE, ALABAMA.
I'LL NEVER GO TO HUNTSVILLE, ALABAMA.
[00:30:01]
TO GO TO HUNTSVILLE? BUT THEY'VE CREATED AN EMPIRE, WHICH WE LOOK AT FROM A DISTANCE AND SAY, YOU HAVE TO ADMIRE WHAT THEY'RE DOING THERE.BUT, UM, I LOVE IT 'CAUSE YOU'RE A GEEK ABOUT THIS.
AND, UM, AND THAT GETS ME EXCITED.
BUT CAN YOU GIVE US A NOT, I KNOW WE HAVE NDAS THAT WE, WE HAVE TO SIGN.
CAN YOU GIVE US A GLIMPSE OF WHAT SPACEPORT LOOKS LIKE, BECAUSE WE HAVE AN EXTRA HALF HOUR AND THERE'S NO ONE IN QUEUE.
SO I IT'S GONNA BE THE MARIO AND DAVE SHOW, BUT CAN YOU GIVE US A GLIMPSE AS TO WHAT THE NEXT 10 TO 20 YEARS LOOKS AT SPACEPORT AND WHAT CAN, WHAT DO WE ENVISION, UH, THAT LOOKING LIKE OVER TIME? I THINK THAT OVER THE NEXT FIVE TO 10 YEARS, THAT ENTIRE SPACEPORT WILL BE FULL, FULLY DEVELOPED.
I, AND IT WILL, IT WILL BE GENERATING SIGNIFICANT NUMBER OF JOBS, WELL-PAYING JOBS, UH, FOR THE CITY.
AND SO WE ARE, RIGHT NOW, WE'RE WORKING WITH METRO.
WE'RE LOOKING TO ESTABLISH SOME KIND OF DIRECT SERVICE BECAUSE WE WANT THE, THE ENTIRE CITY TO BENEFIT.
UM, THE TRAINING THAT'S GONNA BE TAKING PLACE WHERE IT'S TAKING PLACE AT THE EDGE CENTER TODAY THAT WILL EXPAND TOMORROW IS, IS, IS A CENTER FOR ALL HOUSTONIANS.
WE WOULD LOVE FOR NOTHING BETTER THAN TO BE ABLE TO BRING PEOPLE FROM LESS, UM, BENEFIT, UH, COMMUNITIES, UM, TO HOUSTON, TO THE SPACEPORT, AND TO LEARN SOME OF THE TRADES IN MANUFACTURING ADVANCED, UM, MANUFACTURING TECHNIQUES LIKE ADDITIVE AND DEDUCTIVE MANUFACTURING.
THINGS LIKE, UM, FIBER COMPOSITE FABRICATION, UM, UH, ADVANCE, UH, WELDING, UH, MEANS AND METHODS.
SO, SO THOSE TRADES, UM, WILL BE EXPANDED.
AND WE THINK THAT THE SPACEPORT, ALTHOUGH WE ARE LIMITED IN TERMS OF INVESTMENTS AT A FACILITY OF THE HOUSTON AIRPORT SYSTEM, WILL BENEFIT THE CITY, THE LARGER CITY.
AND I, AND I THINK WHAT YOU'LL START TO SEE, UM, IS THE SUCCESS THAT WE'RE HAVING WITH COLLINS, WITH AXIOM AND WITH TWO MACHINES, IS GOING TO EXTEND OVER.
AND YOU'RE GONNA START SEEING SOME INTERNATIONAL COMPANIES COMING IN, UM, THAT WILL TRULY MAKE IT AN INTERNATIONAL CENTER FOR SPACE.
I, AS YOU SAY, WE HAVE NDAS, SO I CAN'T REALLY TALK ABOUT SPECIFICALLY WHAT THOSE COMPANIES ARE, BUT I CAN TELL YOU THEY ARE SOME OF THE LARGER OF THE FABRICATION, MANUFACTURING, UM, COMPANIES IN JAPAN, FOR EXAMPLE, UH, THAT ARE REALLY INTERESTED IN PARTICIPATING WITH US IN THE DEVELOPMENT OF THE SPACEPORT.
AND MR. CHAIR, IF I MIGHT, UH, I'D JUST LIKE TO GET BACK TO THE, TO THE BUDGET BECAUSE I THINK THERE ARE TWO POINTS THAT I'D LIKE TO MAKE THAT ARE IMPORTANT.
AND THE FIRST POINT IS THAT YOU RECALL THAT LAST YEAR AS WE SAT AROUND, YOU HIGHLIGHTED THE FACT THAT YOU SUSPECTED THAT THERE WAS ADDITIONAL REVENUE THAT WASN'T BEING SHOWN.
AND WE JUST SAID, WELL, YOU KNOW, WE ARE DOING IT THE WAY THAT WE'RE ASKED TO DO IT.
AND SO THAT'S WHY THERE ARE SOME THINGS THAT ARE MISSING.
SO THIS YEAR WE SAID, IT'S A GOOD QUESTION, LET'S PUT IT ALL AND LET'S, LET'S MAKE SURE EVERYONE UNDERSTANDS THE FULL AMOUNT.
BUT IT DOES LEAD TO THE BELIEF OR THE THINKING THAT WE OUGHT TO BE CUTTING OUR PRICES.
BECAUSE WE ARE, ARE GENERATING SO MUCH EXCESS REVENUE UNTIL YOU REMEMBER THAT WE HAVE AN INTERNATIONAL REDEVELOPMENT PROGRAM THAT IS WINDING UP.
WE HAVE HOBBY THAT WE WILL BE BRINGING TO YOU PROBABLY IN THE FIRST, SECOND WEEK IN JUNE, $450 MILLION OF FINANCING THAT WE'RE GONNA DO.
THAT'S WHAT WE CALL INVESTMENT.
WE WILL HAVE, WE'RE WE'RE WORKING WITH OUR PARTNERS, UNITED AIRLINES UP AT INTERCONTINENTAL.
THEY'RE MAKING A $2 BILLION INVESTMENT THAT REQUIRES THAT WE COME UP WITH $700 MILLION IN INFRASTRUCTURE TO SUPPORT THAT.
WE'RE TALKING ABOUT TERMINAL A.
THAT MAY BE ANOTHER BILLION DOLLARS, A BILLION AND A HALF, UM, DOLLARS OF INVESTMENT THAT WE NEED TO MAKE TO COMPLETELY RENOVATE AND EXPAND TERMINAL A.
WE'RE TALKING ABOUT THE, THE REPLACEMENT OF THE SKYWAY.
WE'RE TALKING ABOUT ADVANCING AND REPLACEMENT OF THE, UH, SUBWAY.
WE'RE TALKING ABOUT CENTRAL UTILITY PLANT UPGRADE, UM, AND SUSTAINABILITY.
WE'RE TALKING ABOUT DEVELOPING A SOLAR FARM OF 50 TO 75 THAT REQUIRES HUGE AMOUNTS OF CAPITAL.
YOU'VE SEEN THE CAPITAL PLAN THAT WE HAVE PUT FORWARD.
AND, UM, THERE ARE ONLY TWO WAYS TO DO THAT.
EITHER WE GENERATE IT THE WAY THAT WE DO IN THE FORM THAT WE DO, OR WE FINANCE IT.
AND I, I WOULD RATHER THINK THAT WE WOULD WANT TO, TO THE EXTENT THAT WE CAN FINANCE THE INVESTMENTS AND THE CAPEX, WHICH IS REALLY NOTHING MORE THAN LARGE SCALE MAINTENANCE THAT WE MUST CONTINUE TO DO.
I'M A FIRM BELIEVER IN THE SAYING IT'S TAKEN FROM THE MILITARY.
YOU CAN'T OPEN NEW FRONTS UNTIL YOU CAN PROTECT YOUR FLANK AND YOUR ARREARS.
[00:35:01]
AND IN REAL ESTATE IT MEANS INFRASTRUCTURE.SO THAT'S WHY WE NEED TO GENERATE THE, THE COPIOUS AMOUNT AMOUNTS OR LARGE AMOUNTS OF REVENUE.
UM, NET REVENUES AFTER ALL PAYMENTS THAT WE CAN IN ORDER TO CONTINUE FUNDING THE GROWTH, THE EXPANSION, AND FOR THE POTENTIAL CONTINUED CONNECTION AND GROWTH OF, UH, NEW DESTINATIONS, UM, INTERNATIONAL DESTINATIONS FOR THE CITY.
AND I'M GLAD TO SEE, YOU KNOW, YOU HAVE IT BROKEN OUT BY 88 0 1, AND THEN YOU TALK ABOUT 80 12, AND MY WHOLE COMMENTS LAST TIME WAS, UM, I WOULD BET THAT HALF OF THE COUNCIL MEMBERS THAT SIT AROUND HERE, IF YOU ASK 'EM WHAT IS H-A-S-D-C, THEY HAVE NO IDEA WHAT I'M TALKING ABOUT.
HOWEVER, I LOOK AT IT AND SAY, THAT'S A HECK OF AN ENTITY, THAT'S A HECK OF A PROGRAM THAT WE'VE PUT TOGETHER OVER YEARS THAT NO ONE KNOWS ABOUT.
WE OUGHT TO BE SINGING THE PRAISES OF H-A-S-T-C INSTEAD OF HAVING COUNCIL MEMBERS THAT ARE BASICALLY SHOULD HAVE LINE OF SIGHT INTO IT NOT KNOWING ANYTHING.
AND I LOVE THE FACT THAT WE HAVE $286 MILLION SHOWN AS REVENUE AVAILABLE BECAUSE YOU AND I HAVE TALKED ABOUT YOUR COMMENTS ABOUT SPACEPORT, YOU THINK IT'LL BE BUILT OUT IN 10 YEARS OR SO? WELL, WE NEED TO GET AGGRESSIVE IN ACQUISITION OF LAND THAT WE KNOW COULD BE AVAILABLE, AND THEN WE'LL NEVER HAVE TO WORRY ABOUT LACK OF LAND AND BEING LANDLOCKED.
AND WE CAN REALLY BLOW THIS THING OUT AND BE ABLE TO, UH, BE THE, YOU KNOW, THE GOLD STANDARD FOR SPACE PORTS ACROSS THE UNITED STATES.
BECAUSE EVERY TIME I TURN AROUND, UH, NEW CITIES, THEY'RE TALKING ABOUT SPACE PORTS AND HERE'S WHAT WE WANT TO DO.
THEY ALL WANT TO GET INTO THE GAME.
AND WE'VE BEEN IN THE GAME FOR A GREAT NUMBER OF YEARS, AND WE HAVE A DISTINCT COMPETITIVE ADVANTAGE WITH OUR CO-LOCATION WITH NASA.
AND AT THE SAME TIME, THE AVAILABILITY OF SOME LAND DOWN THERE.
SO SPEND THAT 8 3 86 OR UH, A MILLION DOLLARS ON, UH, ON THAT PART OF IT AND WE'LL BE HAPPY.
BUT, UM, WE'RE TRYING TO DISTRIBUTE IT FAIRLY
SO WE HAVE, OH, COUNCIL MEMBER SALLY ALCORN.
I JUST HAVE A COMMENT AND LOOKING THROUGH THE BUDGET BOOK, I, I'VE GOTTA LOVE YOUR GOAL ON TERMINAL MANAGEMENT, THE TERMINAL MANAGEMENT DIVISION, THE GOAL, WOW.
SO YOU WANNA TALK A LITTLE BIT ABOUT THAT, THAT DIVISION AND HOW YOU INTEND TO WOW OUR PASSENGERS? SO THAT WAS A STRATEGIC DIRECTION THAT, UH, OF CHANGE THAT WE MADE IN UNDERSTANDING THAT THE WAY THAT WE WERE MANAGING THE, THE AIRPORT SYSTEM WAS ON A GEOGRAPHICAL BASIS.
THAT IS THAT WE HAD MANAGERS FOR HOBBY AND A MANAGER FOR INTERCONTINENTAL AND A MANAGER FOR ELLINGTON.
AND WE WEREN'T, WE WEREN'T SYNCHRONIZED.
WE, WE WEREN'T FOCUSED ALL TOGETHER AS A ONE TEAM.
UM, WE, WE HAD THESE DISTINCT, UM, ENTITIES THAT FELT THAT THEY WERE ENTITIES UN UNTO THEMSELVES AND GAVE 'EM A LOT OF LATITUDE.
BUT THEN CAME TO REALIZE THAT IF WE REALLY WANTED TO BECOME A FIVE STAR GLOBAL SYSTEM, THAT WE HAD TO HAVE ONE TEAM.
SO WE CHANGED THE STRUCTURE OF THE ORGANIZATION, WHAT TO FOCUS ON.
WELL, 95 TO 96% OF ALL TRANSACTIONS, ALL INTERACTION WITH THE PASSENGERS HAPPENED INSIDE THE TERMINALS.
AND THAT'S WHERE WE REALLY HAD TO PUT AN EMPHASIS ON CUSTOMER SERVICE.
YOU KNOW, I WAS MAKING, YESTERDAY WE HAD THE, UH, FIVE STAR AWARD CEREMONY AND, AND THE MAYOR WAS THERE.
WE HAD A VERY, VERY PLEASANT, UM, CELEBRATION.
AND I WAS, UM, TELLING LAST NIGHT AT NINE O'CLOCK I WAS BACK AT HOBBY TO, TO GREET THE, THE EMPLOYEES THERE AND TO THANK THEM AGAIN AND TO SHARE SOME FOOD WITH THEM.
AND I WAS TELLING THEM THE STORY THAT MANY AIRPORTS WANT TO DO WHAT WE HAVE DONE, AND THEY REALLY WANNA UNDERSTAND HOW WE DID IT.
AND YOU KNOW, THEY SAY, LOOK, WE'RE POURING, WE'RE POURING MORE MONEY INTO TERMINALS THAN YOU ARE.
WE'VE GOT LOS ANGELES, 13 BILLION CHICAGO, 15 BILLION.
I MEAN, I JUST THINK ABOUT THAT.
I MEAN, WHEN YOU TALK ABOUT THOSE KINDS OF MONEY, HOW MUCH MONEY CAN YOU ACTUALLY SPEND IN A YEAR? SO HOW MANY YEARS? YOU KNOW, IT'S LIKE THE NEXT 50 YEARS THEY'LL BE BUILDING SOMETHING.
AND THAT'S FINE, BUT THEY'RE MISSING THE POINT BECAUSE THERE ARE SOME VERY, VERY BEAUTIFUL, BEAUTIFUL AIRPORTS AROUND THE WORLD, BUT THEY'RE NOT FIVE STARS.
WHAT'S MISSING? THE HUMAN ELEMENT, THE INTERACTION WITH THE PASSENGER, CARING FOR THAT PERSON, CARING AND ATTENDING TO
[00:40:01]
THEIR NEEDS, WHETHER IT'S FOOD AND BEVERAGE, WHETHER IT'S ENTERTAINMENT.A LOT OF PEOPLE DISMISS THE PERFORMING ARTS, THEY DISMISS THE VISUAL ARTS, BUT IT REALLY DOES TO CALM PEOPLE DOWN IN A TERMINAL WHEN THEY GET UPSET ABOUT MISSING A FLIGHT, WHEN THEY, UM, YOU KNOW, THEY'RE UPSET ABOUT THE, THEIR SEATS OR WHAT WHATEVER'S HAPPENING.
AND THEY'VE NOW, THEIR FLIGHT HAS BEEN DELAYED.
AND I CAN'T TELL YOU HOW MANY TIMES, HOW MANY STORIES WE HAVE RECEIVED OF PEOPLE THAT HAVE BEEN PASSIONATE, HAVE BEEN EXACTLY THAT SITUATION, THAT HAD BEEN ANNOYED.
AND SUDDENLY THEY HEAR MUSIC AND THEY SAY, WHERE'S THAT COMING FROM? AND THEY GO AND THEY SIT DOWN AND THEY LOVE IT.
THE TIME JUST PASSES CLEANLINESS NEXT TO GODLINESS FOR BATHROOMS. NOT ONLY FOR BATHROOMS, BUT FOR THE FLOORS, FOR THE HOLD ROOMS. UM, AND WE'RE NOT PERFECT.
IT IS THE DESIRE AND THE MOTIVATION OF PEOPLE TO DO THINGS DAY IN, DAY OUT THAT THEY NORMALLY DON'T DO, BUT THEY CAN, YOU KNOW, AND THEN TRAINING BECAUSE THERE'S AN, AGAIN, AN OLD MILITARY, UM, SAYING THAT GOES, YOU DON'T RISE TO THE OCCASION, YOU FALL TO THE LEVEL OF YOUR TRAINING.
SO WE TRAIN AND TRAIN AND TRAIN OUR PEOPLE AND WE REWARD THEM, WE RECOGNIZE THEM, AND THAT'S WHAT MAKES THE DIFFERENCE.
SO I HAVE TO THROW A QUESTION TO MY, UH, ACCOUNTING NERD, MR. BUDDY.
MR. STEVENS, WHAT IS OUR TALK ABOUT REVENUE? WHAT DOES OUR DEBT LOOK LIKE? SO RIGHT NOW WE HAVE ABOUT $2 BILLION OF OUTSTANDING DEBT.
UM, WE'RE GOING TO THE MARKET, UH, VERY SOON FOR, FOR THE A HUNDRED MILLION.
WE WE'RE, WE'RE GONNA, UH, FINANCE THE REMAINDER OF THE I TRIP PROJECT AND SETTLE OUT COMMERCIAL PAPERS THAT WE HAVE SOME, IS THAT THE ONE IN JULY? IS THAT CORRECT? OKAY.
UM, YOU KNOW, WE'RE, WE'RE IN A LITTLE BIT OF A, YOU KNOW, I WOULDN'T CALL IT, UH, TROUBLE, BUT, UH, THERE'S A LITTLE BIT OF A A, A TIGHT SPOT GOING INTO 2028 THROUGH 2032 IN TERMS OF, UH, THE DEBT SERVICE, UH, RISING BEFORE IT FALLS DRAMATICALLY AS, UH, SOME DEBT FALLS OFF IN 2033.
SO NOTHING THAT'S UNMANAGEABLE, JUST, UH, HOW DOES IT, HOW DOES IT COMPARE TO OTHER REVENUES, OTHER AIRPORTS ACROSS THE UNITED STATES? I MEAN, $2 BILLION IN DEBT AND YOU'RE TALKING ABOUT A SORT OF SOME CHALLENGE IN 28 TO 32, 20 28 TO 2032.
OUR TOTAL DEBT LOAD, UH, PER PASSENGER IS BELOW A HUNDRED DOLLARS RIGHT NOW, WHICH IS, UM, WHICH PUTS US ON THE LOW END.
UH, SO WE'RE IN, WE'RE IN IN REASONABLY GOOD SHAPE.
I MEAN THE, THE, THE COVID DISRUPTION, UM, YOU KNOW, CAUSED SOME SLOWDOWN ON, ON FLOWS.
BUT I THINK, YOU KNOW, WE'RE CATCHING OUR STRIDE AGAIN IN TERMS OF IF YOU LOOK AT THE NUMBERS AND THE, UH, MONIES THAT SHOULD BE AVAILABLE FOR, UH, INVESTMENT AND DEBT SERVICE THAT WE'RE IN PRETTY GOOD SHAPE.
WE'VE BEEN JOINED BY COUNCIL MEMBER TAR JACKSON, ALSO, I DON'T THINK I'VE MENTIONED COUNCIL MEMBER, AMY PECK AND STAFF FROM VICE MAYOR PRO TEM, MARTHA CASTEX, TATUM'S OFFICE AS WELL.
SO COUNCIL MEMBER ALCORN, WE'RE JUST KILLING TIME HERE, AREN'T WE?
UM, THE DEBT SERVICE QUESTION, I SEE $110 MILLION NEXT YEAR IN DEBT SERVICE AND SOME OF THAT COMING FROM PFCS AND SOME FROM ARPA, YOUR ARPA FUNDS MM-HMM
SO WHAT, WHAT'S KIND OF THE BREAKDOWN ON THAT? WELL, WE HAVE A LITTLE, WE HAVE, UH, JUST UNDER $50 MILLION LEFT FROM THOSE, UH, UH, COVID RELATED, UH, GRANTS OKAY.
AND THEN, SO ONCE YOU'RE, ONCE YOU'VE PAID THAT, ONCE YOU USE THAT FOR THE DEBT SERVICE, WE'RE NOT IN ANY, WE CAN STILL, WE HAVE PLENTY OF MONEY WITHOUT IT TO PAY DEBT YES.
NO OTHER COUNCIL MEMBERS IN QUEUE.
GENTLEMEN, THANK YOU FOR YOUR PRESENTATION.
IT'S ALWAYS A PLEASURE TO, UH, DIG INTO THE AIRPORT AND FIND OUT EXACTLY WHAT'S HAPPENING OUT THERE.
UM, IT'S A, IT'S NOT A HIDDEN TREASURE, BUT YOU KNOW, THIS IS THE ONLY TIME WE GET AN OPPORTUNITY TO REALLY EXAMINE, UH, THE PROCESSES AND THE FINANCIALS OF THE AIRPORT SYSTEM.
AND IT'S, IT'S VERY PROMISING.
APPRECIATE YOUR CONSIDERATION AND TIME.
WE HAVE A QUESTION THAT JUST POPPED UP.
COUNCIL MEMBER, UH, STAFF, STAFF FROM COUNCIL MEMBER KNOX'S OFFICE.
I JUST WANNA THANK YOU FOR YOUR PRESENTATION.
AND I WANT TO NOTE, MAYOR URI AND TODD ARE ALWAYS RESPONSIVE.
THEY'RE THOROUGH, THEY'RE PROFESSIONAL, THEY'RE TIMELY.
I JUST WANT TO THANK THEM FOR ALL THE WORK THAT THEY PROVIDE TO OUR OFFICES.
WE HAVE TWO PUBLIC SP PUBLIC SPEAKERS, BUT YOU GUYS CAN EXIT STATE, RIGHT? FIRST WE HAVE SABA.
[00:45:12]
MORNING.I HAVE A BIT OF A COLD, BUT, UM, HAVE A COUGHS DROP, SO HOPEFULLY IT WORKED.
UM, SO MY QUESTION ABOUT THE AIRPORT SERVICES TO COUNCIL MEMBERS, UM, IS, ARE THERE ANY PLANS TO, UM, EXPAND AND IMPROVE PUBLIC TRANSPORT OPTIONS TO GET TO OUR AIRPORT SYSTEMS AND ISN'T THERE? I, COUNCIL MEMBER MARTIN, YOU MENTIONED LIKE IT'S A VERY SPECIFIC HOW THEIR FUNDING IS ALLOWED TO USE DUE TO FAAA REGULATIONS.
SO IS THERE ANY FLEXIBILITY IN THEIR PROFITS TO USE THAT FOR TRANSPORT, UM, TO GET TO THE AIRPORT SYSTEMS? SO, I KNOW THERE HAS BEEN DISCUSSION, I'LL LOOK TO ANDY FOR SOME HEAD NOOBS.
UH, TXDOT HAD TALKED ABOUT A BUS, RAPID TRANSIT 45 WITH METRO 45 OR 59 45.
SO THAT IS STILL BEING DISCUSSED, WHERE, UH, THE COST OF RAIL TO DO THAT WOULD BE, UH, TOO EXPENSIVE.
BUT A DEDICATED BUS, RAPID TRANSIT FROM DOWNTOWN TO THE AIRPORT TO INTERCONTINENTAL, UM, IS IN THE WORKS, HAS BEEN TALKED ABOUT.
AND, UH, I, I WOULD SAY IT'S A, IT'S A VIABLE PROJECT.
UM, THERE'S ALSO BEEN TALK ABOUT, UM, UH, SOME EXTENSIONS INTO HOBBY.
I'M NOT SURE WHERE THEY ARE NOW, BUT YES, YOUR QUESTION IS APPROPRIATE BECAUSE THERE ARE CONVERSATIONS GOING ON WITH METRO, WITH TDOT, WITH THE CITY OF HOUSTON RELATED TO HOW DO WE TRANSPORT FOLKS FROM DOWNTOWN TO THE AIRPORT IN THE QUICKEST POSSIBLE FASHION.
AND, UH, I THINK YOU'LL SEE BUS RAPID TRANSIT SIMILAR TO WHAT WE HAVE ON POST OAK, UH, THAT WORKS WELL IN THAT VEIN.
YEAH, I, I'D LOVE TO SEE MORE TRANSPORT.
I CAN NOT SAY ENOUGH GOOD THINGS ABOUT HOBBY AND OUR EXPERIENCE THERE, BUT YOU KNOW, PARKING IS A HEADACHE, ESPECIALLY WITH FAMILY.
COSTS YOU MORE FOR PARKING OVER FIVE DAYS THAN IT DOES FOR YOU.
UM, AND THEN I KNOW, OH NO, GO AHEAD.
UM, I JUST, I THOUGHT IT WAS REALLY INTERESTING TO HEAR ABOUT THE EXPANSION AND THEY QUICKLY MENTIONED JOBS AND UH, THIS IS PROBABLY SOMETHING TO SUBMIT VIA EMAIL, BUT I'M JUST SO CURIOUS TO HEAR HOW MANY JOBS WE'RE EXPECTING TO SEE COME TO THIS BASED ON THE SPACE BOARD.
SO I'LL JUST SUBMIT THAT VIA EMAIL.
AND THEY'RE, THEY'RE NOT, THEY'RE VERY HIGH PAYING JOBS.
THEY'RE REALLY GOOD ENGINEERING JOBS OUT THERE.
I KNOW THAT COUNCIL MEMBER ALCO HAS A SON THAT GRADUATED IN MECHANICAL ENGINEER AND THEN, UM, HAS OPPORTUNITIES TO AEROSPACE ENGINEER
BUT, UH, YEAH, THERE ARE GREAT OPPORTUNITIES DOWN IN THAT AREA.
AND, UM, YOU KNOW, THE INTERESTING THING IS A LOT OF THE THINGS RELATED TO NASA, NASA HAS MOVED SORT OF PEOPLE AWAY FROM OPPORTUNITIES THERE, BUT IT'S MORE THAN, UH, UH, CAUGHT UP ON THE, ON THE PRIVATE SECTOR SIDE AS WELL WITH COMPANIES LIKE AXIOM, INTUITIVE, UH, COLLINS AND, AND MORE OF THAT ARE IN THE WORKS RIGHT NOW.
UH, DIRECTOR DIAZ MENTIONED, UH, YOU KNOW, OPPORTUNITIES, BUT WE HAVE NON-DISCLOSURE AGREEMENTS THAT WE CAN'T SAY, BUT, UH, THERE ARE A LOT OF COMPANIES THAT ARE INTERESTED IN WHAT WE'RE DOING IN SPACEPORT.
SO THANK, I'LL SUBMIT THOSE QUESTIONS VIA EMAIL.
HOW ARE YOU? GOOD, HOW ARE YOU? GREAT.
UH, DO I CLICK ON THIS? OH, NO, IT'S GOOD.
SO MY QUESTION IS KIND OF IN LINE WITH SAVA.
SO I LIVE NEAR THE HARDY TOLL ROAD, UH, AND I SEE THAT THERE'S A RAIL LANE, RAIL LINE, AND I'M ALWAYS WONDERING LIKE, COULD WE TURN THAT RAIL LINE TO GO STRAIGHT INTO THE AIRPORT? 'CAUSE THERE'S ONE RIGHT IN THE MIDDLE OF THE HARDY TOLL ROAD, I THINK THAT WAS OWNED BY UPRR, IS IT? YEAH.
AND, UH, THE RAILROADS RUN THE, THE UNITED STATES, NOT THE PRESIDENT, UPRR, THE RAILROADS ON THE UNITED STATES.
THAT'S MY SMART OUT COMMENT FOR THE DAY, BUT I DOUBT IF THEY WOULD GIVE US ANY ACCESS.
SO THEY WOULD NEVER GIVE US ANY ACCESS.
SO THAT WOULD BE LIKE LOBBYING AT THE FEDERAL LEVEL AND THINGS LIKE THAT? CORRECT.
IF WE WANTED TO GET THAT DONE.
NO OTHER QUESTIONS FROM THE PUBLIC, SO, UM, AIRPORT SYSTEM.
APPRECIATE WHAT YOU DO EVERY DAY.