Motion.

So move.

Motion by Tomikas or second.

Second.

Second by Dwayne.

Any discussion.

All in favor, say aye.

Aye.

Aye.

Motion's been adopted.

Somebody online, sir.

Umber.

Yes.

Okay.

So we're good.

Oh, so motion's been adopted.

Um next uh Robert recommendation of to utilize four of us as our auditor uh for the 2025 audit.

Robert, yeah.

So for us ours, uh, we went through a competitive process last year.

When we go through that, we ask for a rate commitment for either three to five years.

And in this instance, Forvus was comfortable with a three-year, a lot of uncertainty of inflation and that type of thing.

And so um we obtained that, but that's a little unique compared to normal contract.

Normal contract, we've we do a contract for the whole time period.

The approach we've taken, and I think works very well, is to come back each year, have the rate guarantee in hand, but discuss if the Bennett's an audit committee is satisfied with the result and approaches by uh the independent auditor, and then to bring that forward each year to the board.

That's what we're doing.

Um the uh price that was in the memo is the uh agreed and negotiated uh three 2025 audit price that was in the three-year rate guarantee.

There's one more year from that guarantee.

That would be the basis, and if there's any questions, um Rick asked me if he should be here today.

I said I don't believe he had another commitment.

I said, I think the right place to invest your time is the full board.

So um if there are any, then you can also ask those questions there, or we could uh follow up after this meeting in writing.

A motion to approve so moved second, second by to make uh is there discussion or questions for Robert?

Robert, I assume you don't you have not had any problems with Forvest, but can you confirm that that you're happy with what they do each year?

They are experts and they bring value, so I would say no problems.

It is uh and it's always when you have somebody auditing you, right?

You're going through a process together, but the thing I would say is is they never uh have the relationship in the history stand in their way of doing what the board is in um engage them to do, which is to dig deep, go into things, and to bring forward anything that uh they would find.

So it is kind of the best of both worlds to have that kind of integrity with that working relationship, so it is uh working very well.

How long have we went with the so depending on the different firms?

It actually has been over 30 years that and it used to be long time ago, George S.

Olive, or just all of became BKD, BKD became Forbus, and now Forbus has become Forbus Mazars.

We don't have the same audit team for that whole time, but the airport practice for that CPA firm actually, I think got its genesis in Indianapolis.

They became experts.

We are actually a somewhat complicated airport, having a noise program, all the grants, the different things, and they really became experts in that.

Um, there are a couple other CPA firms that actually bid on the work that the last time.

Um, and ultimately the approach by Forbus, their use of local uh other vendors.

They are this audit is 100% staffed locally.

Um, some of the other firms bring uh people from other other locations, all of those factors were what went into the selection team.

Uh Maria, I think was part of when we were on that team, Alias was as well.

So uh it is that longevity, and we have done many competitive processes through the years, it's not just uh roll roll roll, so that's why it was done again in 24.

What you said, what's impressive to me is that they may have started going back to George Solliver whoever had the original contract, but based off this initial representation, they've built a national presence, right?

Which is so they have which is I think is important in an audit, having a perspective from other similarly sized airports, or larger, yeah.

They do larger, you know, they did Minneapolis, they had done Denver, and again things change.

So, but having that knowledge base, absolutely.

Any other questions?

All in favor of the motion.

So you want to pose motions about supplemental incentive plans.

I'll take that.

Okay, thank you.

Good morning.

I happy to be here in front of you to talk about uh an update on air service and um Robert's gonna pull up a slide for me, but if within the packet, the transatlantic supplement, which is a document that I would be seeking your support for today, uh that then we would propose to take to the board in October for approval, can be found on pages five to eight of the packet, and then there's a supporting memo that we're on pages nine to ten that sort of explain the background and uh what the supplement would actually include.

So we've we've to simplify from all the words, pictures help me.

I mean, you know, hexagons that that twist and turn.

Mine's not gonna twist and turn, but I've got some simple pictures that's that are going to help us focus on really the true value of air service, and if you take that, how that applies to public value, each of these icons really demonstrates the public value that's coming out of air service.

So when you look at economic impact, take so we're talking about a transatlantic flight, a flight to Europe.

Um that there's this this would be a supplement.

We have a basic air service incentive plan that is still in existence that covers domestic routes, it covers all international routes.

It's less robust than what we're putting in this transatlantic plan.

So I really want to focus talking about economic impact of a transatlantic flight, is calculated at more than 60 million dollars a year.

And we've got some stats to share today about Airlingus and Dublin and the success of how that flight is progressing.

Can I interrupt?

Yes, that's 60 million is economic impact of a of a transatlantic flight year-round.

So if it's less than year-round, it would be less than that.

But and we've got a calculator tool that Maggie and her team use, and then we've had airlines calculate independently, and those numbers align really closely, which gave us confidence.

So when you think about economic impact, you look at business attraction and retention, increased foreign direct investment, um, the ability to attract for conventions and us being such a significant convention city city, then you look at quality of life, enriching the cultural landscape of a community, um easier to build cultural diplomatic and international trade relationships, sister city relationships.

We've seen new sister city relationships happen within our state since we've been able to add transatlantic flights going back to Paris and now having Dublin.

Um, it reduces travel friction.

We all travel, we know when you don't have a nonstop, the friction that can occur, the challenges that can occur.

You really, when you take that friction out and you see that demonstrated in the numbers.

So if you go back to before we had the nonstop flight to Paris, the number of people that were going to Paris each day after we added the flight increased by more than 100%.

People who people will decide to go to a destination because you have a nonstop flight.

I think someone over there may have told me he decided to book Dublin for spring break because we have a non-stop flight.

We're now seeing more than 90 people on average on each flight going to Dublin and not connecting to go anywhere else.

The number of people going to Dublin before the flight was probably in the 25 range.

Economic impact that also what the Air Lingus has told us is they're surprised by how many people from Ireland from Europe are booking to come to Indiana, more than they anticipated.

So 25% of the bookings are coming to Indiana.

And when you go look at stats, you can see anywhere from 1200 to 2,000 of average spend from an international traveler coming to our city.

So a talent attraction and retention.

We hear this from the companies that we work with and interact with for them to be able to really get top talent, top scientists, um, you know, top the top folks that they need to attract to work at the businesses that are thriving here in the industry sectors that we're growing in tech, bio uh bioscience, life science, um, having a non-stop flight to key destinations is really important.

Um since we've added Dublin, more than one sports tech company has relocated its headquarters to Indianapolis or uh made a significant presence and investment offices in Indianapolis because sports tech is is really thriving in Ireland, and we have an initiative in our state around sports tech.

So that's been really cool.

So background to all of this.

Um you see you know, elevated city and state awareness, supporting commerce and events, and then just demonstrating confidence to other airlines.

They're looking to see how have these flights performed already, and we had really strong performance on Paris until COVID happened, and we've seen really strong performance with the Air Lingus flight, so much though that Maggie received a message two days ago.

Currently, the Airlines flight operates four days a week.

It's performing so well, they're adding a fifth day for next year.

And we just found that out two days ago.

We had not anticipated that happening this quickly.

So it's demonstrating that the market for a transatlantic flight is still really strong.

Uh around 600 people a day are flying to Europe from within our catchment area.

So within a two and a half hour range, over it's like 600 people a day.

Um I talked about the stimulation that occurs.

So that's with out having nonstop flights to many of these destinations.

Uh so we continue to work with airlines.

We hosted an air service conference.

We may have talked about that here in June.

It was called Jump Start, and we uh had a great event on the plaza at Gain Bridge the night before Pacers game.

These airlines were blown away with our city.

Um one of the Pacers finals, yeah.

So it was it was yeah, you spoke.

You opened up the conference.

It was it was great, and so they got to see our city in full action, which was which was just awesome.

And we have multiple airlines who are interested in another nonstop flight to Europe, and we are continuing that dialogue, and that having this incentive plan in place is really important to that conversation.

Um we've had specific requests to confirm already what incentives would be in place for another route.

Um what we are hearing is our peer airports, so to remain competitive, we're being told, you know, you are a serious contender for another nonstop flight to another destination, along with your peer airports that we're talking to, they've put forward some very lucrative incentive packages.

And so we're being asked to understand what is our incentive package.

When we got the Air Lingus flight, the transatlantic supplement was effectively suspended because the way we had written that supplement that those dollars in the last incentive plan for a transatlantic flight were only available to the first airline to bring that flight.

So we have no more dollars to really bring to the table until we update.

And so that's why we're bringing this forward to you today to update.

And just another to give a couple of peer airport examples.

Um, Cincinnati uh has two nonstop flights to to Europe with less passengers than us, as well as Pittsburgh.

So it is very sustainable based on the numbers of people traveling, our numbers of travelers, so it will be very sustainable for this route for a new transatlantic route to occur.

So maybe if we hop over to again, this kind of gives that background in 2022.

Maybe we go to the next next point, um, 24.

We announced to Airlingus uh at Dublin, and then oh, this sort of is what I already shared with you.

I forgot that this was all gonna pop up nice for us that we've gone from four times a week and and they'll be moving to five times a week next summer.

So maybe if we move to the next slide, this would just sort of spell out the numbers for you uh in terms of what would be um what this incentive would look like.

Um we are proposing three million up to three million dollars per year to fund a new transatlantic flight.

And I'm trying to illustrate that in blue.

The numbers in black, so you'll see the first one for Dublin.

That's the commitment that's already been made under the prior incentive plan.

What's illustrated in blue is the maximum amount of incentive.

If we would get two more flights, the likelihood of two more flights in this short term isn't high, but we're building a plan so that we don't have to keep coming back to you and putting that.

We're at we're requesting to put a three million dollar per year uh cap on the plan for two years, and no one airline could get more than two million per year.

So we'd build three, but one particular airline could not get more than two million per year.

And the only way it would go to three years is for a specific uh route.

We identified five key markets.

Uh Paris, London, Frankfurt, Amsterdam, and Madrid.

Those are the key markets when we've done the business research that would that would be most important to the business community here in Indianapolis.

If an airline would bring a route to one of those markets and operate in accordance with FAA guidelines, we would propose extending to a year three.

And that's what we're hearing.

The airlines who are talking to us today are telling us our peer markets are extending to a year to a year three.

So this is just to give you a view of so for 2025, we're expecting to pay out through fee waivers.

So when I say payout, a lot of this is waiving their landing fees and for an air new airline coming in, waiv their their ticket counter rental and their gate rental, and then some level of marketing dollars.

So we're expecting to pay out 1.33 million in 2025.

The bulk of that related to Airlingus and the Ireland flight, if you look back over the last three years, it's been 200 to 250,000 per year.

It's been much lower.

We obviously ramped up the incentive to get this transatlantic flight because that's what our competitive markets are doing, the compet other cities were competing against.

So the max, if you look forward to 2026, there's no way we would get two additional transatlantic flights next year.

If we should get an additional transatlantic flight, which you know, there as I said, airlines are interested.

Um, we would look at a max two million dollars in funding for that.

So that would put us at 3.8 million with the Airlingus uh incentive.

And um we've done a max incentive in the bottom section for 2026 of this T, the bottom line TBD new opportunities of a million.

That's just to give you a view.

If if for some reason a whole lot of airlines came in and brought in a lot of new flights that were to specific markets in our incentive plan, again, over the last three years, that's averaged under 250,000.

Uh, so that would put us a max exposure of 4.8 million in 2026, and then you see that play out in what the numbers are max exposure for 2027 through 2029 with the proposed incentive plan.

Um, so that kind of uh overviews what is being requested.

You see the document within the within the packet.

Robert and I have spent time to make sure that the funding would be available as he's looked out through our funding plan that gets presented with the capital program and have a confidence when you go back and look at the value that would be delivered should these flights present this opportunity for this community and for this airport, that value would certainly uh warrant the way we would adjust our funding to to be able to cover this.

And you know, something to keep in mind, put into context.

Um these amounts, although seem large, are completely insignificant to deployment of an aircraft.

This is all very data-driven, and these are kind of table stakes and deployment of an overseas aircraft on an annual basis.

If I'm not right, and my numbers aren't dated, is between 60 and 80 million dollars a year.

So that's what the airline is actually putting up.

So this is kind of incentive landing fees and a couple of other things that are basically table stakes in the industry.

And there were the actual gain is an incredible ROI when it comes to economic impact on the back.

And in a very interesting way.

The funding source ultimately is the other airlines.

There's no loss in the whole thing.

And there's another point, sorry, that I realized I forgot to talk about that was important, is we are working with the ND Chamber to establish an a privately funded air service incentive fund.

Is we are working with the ND Chamber to establish an a privately funded air service incentive fund.

So we've the Indy Chamber is doing a study currently.

We helped connect them with some companies that do this for airports and cities around the country.

And they are studying how we could establish an independent organization or entity, or maybe it's a subsidiary of an existing chamber or economic development group that we're companies that really believe a having flights to critical markets is important enough that they're willing to make some commitments.

And so we've already started that work to establish that fund.

And in conversations with multiple companies who we know uh would benefit from certain markets we're looking at and talking about in Europe.

Have we had two companies already make commitments to be a part of that effort?

And then going back, we've gone and talked to IEDC and Indianapolis economic development to say if we establish this private fund, we're hearing from the airlines, they want to know that the communities behind that.

They want to know will the state be at the table, will the city be at the table?

And we've already had commitments from the state and the city to also contribute towards these transatlantic flights.

So it's it's really cool to see community-wide effort.

It's not just the airport.

So we are the catalyst, and there's an expectation that we're at the table with incentives, as now co corporations are coming to the table, the city and the state are coming to the table as well.

So let's get a motion before we have discussions a motion to approve this.

Um what questions or comments?

Yes, Jeff.

Well, when we looked at the uh economic benefit of the flight, the flights plural.

Um I know with the Dublin flight, we had a major Indianapolis company was very interested in the Dublin flight, and then there was a lot of synergy there.

Um, so when we look at the what it was it, 64 million dollar number or whatever the the annual benefit number was, how much of that is because of that relationship, and do we believe that we can uh duplicate that, or is that an anomaly and not fair to look at for future flights in different places unless we have a company like that committed to it.

And I know that touches on some of what you were just saying, but uh unless it it it may seem like art, but it's actually all data-driven.

Unless it's unless we have people flying into those markets and that sort of economic connection, we're not gonna go after the flight in the first place because there's not enough, there's not enough volume to support the flight.

And the airline isn't going to deploy the aircraft anyway.

So it's not we can't get a flight to Beijing.

We can't get a flight to Israel.

We can't get a flight to different places because we just don't have enough volume.

There has to be a deeper connection, both economically passenger-wise, to be able to start talking about these flights.

So, Jeff, I you're spot on that the as Mario said, the the destinations we're talking about with the carriers we're talking to, have those business connections in addition to being great leisure markets.

Uh, but there are those business connections exist for um the markets that we are really in deep conversation around.

And that's what a lot of the work that Maggie and our entire team does is we're out in the community, we're harvesting all of that information by the business relationships we create to understand where folks are, where companies are expanding, growing, investing, and we then take that because the airlines can scour data that's publicly available.

We can have some conversations and and really bring more depth to those conversations, but it's really tied to markets where there's business connectivity as well as leisure.

So is the current tariff environment impact that dramatically?

I mean, for instance, are there companies that used to have these relationships that now wonder whether they will, and are there a way to pick and choose industries where we feel are locations where there are industries with the ties to us where we feel the tariffs are less impactful because it would be a bad thing, obviously, for us to spend a bunch of money, I would think to get a flight, and then whatever industries were related, uh, those connections go away because of tariffs.

The answer is yes, the economy actually affects the flight and and where we actually target, but it it's a it's a weird industry.

So let me let me step back a minute because everybody gets lost in the industry.

It's bizarre because our team, which is excellent, is competing against other teams in our airport industry to try to attract flights.

What we're trying to do is sell the airlines that they're going to be making more money in our market than any place else.

You know, no other industry does this, but this is the way we all work.

And part of it is the economic side of it.

Yeah.

Part of the tariffs, part of the uncertainty going into the future, the economic uncertainty, and all of that bundles into the analysis that Marsha and Maggie do to actually try to sell the airlines.

So the airlines are actually looking at this also.

So the answer is yes.

It's it shouldn't be that way because they're accessing our marketplace and building a certain amount of revenue.

You would think it would be the other way around, but we're trying to sell an airline that are going to make more money in our in our industry in our backyard than in Cincinnati in a bizarre way.

What are the questions?

So Marsh, I have questions.

One more times indirectly referred to.

But it sounds like an imminent opportunity.

Is this is this prospective, or is it you think you can apply this to opportunity in the near term?

We're involved in discussions currently, um, that could lead could lead to an opportunity as early as 2026.

And if not 2026, then 2027.

My second question is I was interested when you said there were five calling capital markets and Europe that was curious if you read that list in order of uh priority.

I didn't.

I just read them kind of as I recalled them and had written them down.

They were not in order of priority.

But I can tell you the the city that we have the most number of people traveling to each day without a non-stop flight is London.

And London's been the number one market for as long as I can remember in terms of the number of people, about 60 or more people per day uh from this market go without a non-stop flight to London.

Does it every day?

Does it impact the value of the Dublin flight have another UK flight as opposed to something farther central Europe?

I mean, do we maybe not, but I would for instance, I would have thought that one of the reasons I might fly to Dublin is if I wanted to tour around the UK.

If you had a direct flight to London, I probably would fly to London instead.

And I understand that's not the business flights, that's the leisure stuff, but I wonder how that how you think that impacts 70% of the people who are taking the Dublin flight are just going to Dublin.

They're not connecting and going anywhere else.

So we can see that, and that again, that stimulation is because of that flight.

That many people, that's where I said like 90 per flight are going just to Dublin.

They were not doing that before the flight.

So there will there will be some level of impact, but we don't believe it would be that significant.

Again, Cincinnati and Pittsburgh are smaller markets than us.

Fewer people travel out of those cities, and they currently have two flights and are able to support both of them.

But UK flights versus my question was more to the UK centric of both flights as opposed to say one flight to London and one flight to Frankfurt or something like that.

Okay.

I didn't know if there was a if that meant anything.

Um maybe we just can't possibly know.

I don't I don't think you can know.

Although we all we do know is that both of these are strong markets, and we we've been able to see through the data that Dublin is strong on its own, that that Ireland and that is a destination is strong on its own because you see fewer people connecting than you might have expected.

There are further questions.

All in favor of the motion, say I aye.

Anyone oppose motions adopted.

Thank you very much.

Well done.

Hope you're successful.

Uh next is uh Rhea, internal audites.

Good morning.

I have shared with you the uh audits that have been completed.

And I wanted to point out for the concurr audit, um, the concurr platform that we see is a secure platform that has a lot of controls and procedures in it.

And this is what we use for business expenses that are reimbursable and for travel.

And once the traveler puts the information in Concur, then their supervisor, manager, director, whomever has to approve that.

Once that approval goes forward, then it goes through a process where Robert's team actually reviews the expenses and goes over what's been submitted.

So there is another review that's done even prior to the auditors taking.

So Robert's team will catch things such as if someone put an expense in the wrong code, they use the wrong code for the expense.

If someone inadvertently put a tip amount in that was categorized wrong, as opposed to putting in the amount of the meal and then the tip separately, that's what the platform allows for you to do.

So the things that Robert's team catches, my team would not see.

So when my team comes along, although it's not a lot of errors that are found, um, his um team, Stacey, Lacey, and Shelly do a great job of catching those things.

They then go back to the traveler, let them know what the errors are, so as not to repeat those errors, or sometimes it's just training to let them know what categories that they need to go in.

So the results of 23 and 24 that we have.

Um there was one incorrect expense type that we found.

Um transaction had a tip for more than 20%.

And again, it was a um receipt where the tip was already included.

It was a business expense, and because of the number of attendees, the tip was already included in that.

So it looked like it was part of the bill where it was the meal and the taxes, and sometimes there'll be two lines of taxes.

So it looked like the tip had not been included.

So you really had to dig for that.

Um that was one that we found.

And then there was one expense that was disallowed that was subsequently reimbursed by the traveler.

Um, so again, the individuals were notified.

We shared the information, and um, I don't think that it's anything that's a recurring issue or problem.

So, any questions about that?

Moving on.

If I want to tease me, then I'm gonna great choice.

And I you know, pay her with a credit card and ask for a tip.

Right.

I'm gonna hit 22%.

Um I'm just making the point that I get the 20% limit, but think in today's world on smaller transactions, especially in the service industry.

I I just I don't have a problem with 22%.

I'm just making that I don't know if I make that point of internal audit or tomorrow, but well, that's part of what you all see if you guys want to set a policy higher rate.

It's in the travel expense policy.

It's a policy matter at 20%.

Yes.

Okay, so get to us, we'll take a look at it.

And to your point, I think you're buying some for two bucks and the and you want the person you want to reward the person 20% of two bucks is not much money.

And it seems to be that you could do higher, but 20% of a $300 deal for so I mean it might not be just a percentage maximum, but a sliding sale.

On the other hand, if you want to give somebody an extra dollar, could do it out of your pocket and I get reimbursed for it, but well, whatever.

Let them work on that and we'll call up with some recommendation.

I see your point.

We'll work on some recommendation.

Yes.

And for the committee's um knowledge, what we do see is a lot of times the um traveler or the person that has the expense, they will pay out of pocket cash or they will go ahead and give an appropriate tip and the system catches it.

So good point.

We will look at that.

Thank you.

Go ahead.

Um, for the procurement card audit, um, as you know, we have uh PCAR folders that um have cards for business expenses, and um this is another area where Robert's team actually kicks in and does a review prior to um it getting to the audit team.

Uh for the P card audits, there's a packet that the PCART holders put together every month, and then there's a approver that will approve the PCART packet for that particular holder, and they will review the expenses, same type of process as I stated with CONCUR.

Then after that, um Ilias on Robert's team will actually review all of the P card packets.

Um make sure that the expenses are appropriate, same kind of thing that it's coded correctly and all of that.

So when the auditors review this, it's actually after it's it's gone under a couple of reviews.

Um we are tax exempt, so sometimes the P Card holders will either um not have the form or because of the nature of whatever the expenses, taxes will be charged on that, uh, sales taxes.

Um there were some receipts that were missing, for instance, if there was an order done online, and the receipt was actually online that they could print, but they forgot to print it and put it actually in the packet.

So that was something that we found.

Um there are quarterly P card holder meetings, and so Christina Harold in the uh procurement department runs those meetings, and they have an opportunity to share with one another, but also Christina will bring up anything that she's found that might be something recurring or um just information that they actually share out.

Robert's team actually participates in that.

Um so we didn't determine that there was any uh misuse uh of the PCART uh holders or uh the expenses they've been reinfirced.

We are in the process of reviewing the 2024 P Card, all of the P Card packets, so that is forthcoming.

Any questions?

And then we just had a few that were completed.

Um at the next meeting, then I will be bringing forth a request for the 2026 um audit schedule, and so you'll see that, and then also whatever we've completed from this point forward.

Questions from Maria.

Thanks for great work.

Thank you.

Yeah, and the next section is about policies, and the the very last page of your packet has all the policies that are shepherded, and that finance and audit committee has responsibility for policies are what are driving Excel in the authority.

So on the financial land, the policies that you guys oversee that we update, it is a foundational piece.

Um, and there are four that we are looking at still that I'm not bringing forward because we, as we evaluated them, said we have more questions we have to work through.

So that very last page, you'll see that there's uh the that's a light green that uh little difficult, but the investment policy, the company credit card policy, the bearable rate, securities and derivatives policy, and then a policy that has really been impactful, but that you did not uh look to actually update and we're discussing it now, is the financial policy.

That is the oldest policy that we haven't gone back and looked at established based cash on hand targets.

Um it mentions uh a type of airline agreement.

We don't even have any more.

Um but we're thoughtfully going through those four.

So the intent is to bring them to November or later if it takes more time.

I'm not being rushed.

I'd rather have excellence on the policies because of their importance.

The policy that we are also not discussing is the business expense reimbursement policy because we last discussed it and it was approved earlier this year.

Doesn't make sense to come back again and get that one, and now there's an open question on that one.

That's fine.

Yeah, and then there's the rest of the policies and the charter then we are bringing forward with no change.

But the each of the policy says we will give the committee the opportunity to be reminded and to look at it, and staff have no changes, but it may be something that like a 20% tip going up that you look and go, you know what?

I want to discuss that.

So it's this opportunity, right?

We can deal with the charter.

Staff have no changes thought.

There's been no discussion on the point.

Chairman, if you have no thoughts, then I think it's uh that you guys have reviewed it and we will just note it.

You don't have to take action, it's not an action standpoint.

But if you have recommended changes, I'll be in November.

Right, correct.

That's where we'll move them up and they'll be in that top section.

Okay.

Okay.

Any comments from the committee?

Okay, let's keep going.

Right.

So now we're gonna go to the uh the the rest of the policies that would be post-issuance uh compliance policy that's for bonds, defined contribution, retirement plan, fiduciary committee policy.

Um, I don't have it up on the board.

I have to jump front here.

Um just on the front page, internal control policy, debt issuance criteria policy, and the commodity price sizing policy.

If you'd like me to talk about the intent of each or anything, or we could look at them online, but the policies as written are currently sufficient.

I think they're appropriate, and staff has no uh recommendation to make any changes on these, and what again, each policy we have stated, and we're doing this at the top of each of these items.

Um, especially something like the uh well, the investment policy is not here.

What used to happen we go down to city council and they'd say you haven't uh it's actually the municipal corporation, it's no, it's the um the banking side key thing that meeting county board of finance, Mary Courtney, and they require us to have a fresh investment policy, great practice.

So we started doing this uh where we say nope, it's been reviewed by our finance and audit committee and no changes, and that's satisfied that.

But we are gonna talk about the investment because there's a couple things we look and say, I think we can change a few things that would give us more flexibility to have access to uh some more yield, and it's specific to the West Indiana.

Um, so that's what why we held that one back, but we want to do a little bit more work to get that one done.

So in this meeting, you're making no recommendations on any of these five policies.

So there's no action request, no action, only discussion.

But you'll note that we reviewed correct.

Any discussion or questions from the committee?

Okay, okay.

Um those as reviewed correct.

Thank you.

Um wanted to introduce Keith Rexing.

Keith has been with the airport authority for 10 years, manager of treasury, and has uh reporting of receivables uh coming and up through him.

Um a lot of times if you see uh there's uh financial statements that are sent out, yeah.

Keith uh will do that, but um Alias is not here today, he is down in Florida participating in a leadership summit or a board member uh position he's in with a uh a children's church camp.

So they're really investing in those board members by having that.

So wanted you to uh meet Keith and uh we're right in Keith's wheelhouse here with the next item of uh liquidity uh cash reserves and that.

And I'm gonna have to uh get us to the right place in this presentation.

You know how they keep uh changing Adobe, it makes it difficult to navigate.

So I'll get there just real quick, Keith.

Um page 5070.

Good morning.

Uh the first update is pretty quick.

Uh, there's been no material change in our days cash on hand since the last time presented as in June.

Um we're at 542 days of cash on hand, and it comes out to about a year and a half.

Uh important to note this does not include any of our bond proceeds from the hotel or other recent debt issuances.

Well, I don't know if there's any questions about liquidity, but just a high level.

I think it's good to touch base always, and our charter indicates that we will do such.

That's ultimately uh discussion about this important.

So when you change the policy, Robert, well with respect to days on hand, what'll be our target, or is it is it's I forget what's in the policy.

So the the policy is written, and uh I think I continue to uh learn 2020 was a very learn good learning experience.

We split cash days on hand into two buckets, and we would look at debt days cash on hand, and then we would look at operating in 2020 when we had to jump in under the water with our oxygen tank of uh reserves, and we started to look how long can we live underwater?

Didn't look at cash in that it was one.

That's one of the biggest changes I'll make.

That's the way we're presenting this.

We're looking at that policy has it split today.

Um and it is a target of 400 to 500 days operating, and it had a 365-day uh debt.

So that's the fundamental change.

Well, we had a target of 400 to 500, and this is 2014 when we did the policy, and we weren't at 400.

So that's why it was written as such as a target.

And that's part of what we're discussing internally is what is an appropriate.

Is it a minimum?

Is it a target?

And I think target is the right method to use uh for us, um, give flexibility as we go forward.

Um, so we're working on that, and that's what the biggest change in that policy would be is to say it's one target.

Let's not complicate.

It's not a minimum, it's a target.

Correct.

It'd be that, and that it is one day's cash on hand, not this separated two days that doesn't make sense.

All right, Keith.

Okay.

Um the next treasury updates on the next page, page 51.

This is a dashboard of our investment performance.

There's two things I want to note on this page.

The first, most important is that we're in compliance with our policy.

Uh that's something that we monitor regularly.

Uh we talk with the third bank and our banking partners, and every decision that we make to make sure that we're staying in compliance.

The second thing, the top um, right at the at 6 30, we're anticipating excess investment income of three and a half million dollars.

And this is almost all related to larger balances than we'd anticipated when we set the budget.

Um, and almost all of that's construction funds.

So the bond proceeds that we've we've received.

The draw schedules have changed, so we've earned more.

Uh that will stay in those construction accounts and continue to fund those projects.

Um, we do think that we'll have about a half million dollars extra that we can put towards the airline incentive program.

Um that wasn't worth it.

Questions there.

Uh the rest is other information that our investment policy uh requires us to provide.

Um, be happy to talk about any of it.

Uh the last thing I'd want to touch on is on page 61.

Uh this is a short list of the of our banks and their tier white capital ratios were required to let you know if that ratio falls below six percent, indicates uh health and their operations.

You can see that uh the ratios are steady and change, and they're well above the same percent that we would be required to let you know about okay.

So I don't know if there's any other items on these two that you'd like to talk about.

If not, um I think you have have anything else.

Great, thank you.

So if we went to the next item, I just wanted to also introduce Hawkins.

Is the longest uh serving finance uh member of the finance team?

Um, and Lisa Hawkins is uh a rock in uh all things budgeting, all things making.

What's that?

I would call our rock star.

Okay, rock star.

But but the thought process of helping people, so I've said along and I do it in employee meetings.

You know, I was taught that's what finance a findings degree is.

I just teach you to say no.

That's what they do, right?

Ultimately learning to say yes and figuring out ways to accomplish the strategy, that's success.

Lisa is well versed in that and helping the organization move forward.

So Lisa really loves to not ever be at the table as well.

So uh very embarrassing to her, and we're very happy about it.

But ultimately, just you having access to have Lisa be here.

Um, that's what I thought would be really good.

Um, and ultimately that was gonna lead this, but when we start getting into you know deeper questions, if there are any, um Lisa is somebody I rely on to help me make sure that uh my understanding is right.

Go ahead.

So excellent certain.

Yeah, absolutely.

Uh always recognize correct.

Um Lisa that's a long introduction.

It was worth it, right?

I mean, it really is.

So thank you for entertaining my uh my verboseness.

I had no hexagon, but you know what?

What we should do is Lisa, right?

Isn't that what we should do, right?

Because it's stability, it's efficiency, it's uh but uh I knew that we could bring that in somewhere.

Lisa good morning, it's just over the July results.

And this is our highlights page, um, very high level look at where we are, airline activity and plane passengers.

We are currently percent budget and 0.8 percent below prior year.

And I don't know if you recall earlier in the year when we were working on the budget, we were anticipating there could be possibility of a slowdown, and we weren't sure what what the what was going on with the economy, but fortunately we haven't seen that hit us yet.

So that's good.

Um landed weights, the passengers actually we are running above budget and prior year.

Cargo landed weights.

We are we've been trending down.

We've been um 8.8% year to date budget and 6.9 percent versus prior year.

However, um for the month of July, we were only 0.1% below budget and um actually exceeded prior year by 4%.

So we saw it kind of turned around the July.

So we'll we don't have August yet, so we'll look forward to seeing what's in the months to come.

So financial highlights, total revenue, we are um about up 2.1 million dollars.

That's primarily due to the increased activity, airline activity.

Um the expenses we are under budget 4 million, and um coming down to the bottom line are 25 outperformance that will reduce future rates as of July is at four four million dollars, and we are looking at that um currently reviewing and planning um to use some of this outperformance in some best use projects uh the team is working on.

So, any questions with that?

So we'll get into the more details on the next slide.

Um this is the operating revenues, and I just want to point out some items.

I I mentioned before landing the cargo landing fees, we are down 1.1 million dollars, and that's that relates to the landed weights being under budget by 8.8 percent.

Revenues uh we're up on retail parking revenue for up a million dollars, two percent, and that's in line with our passengers being over budget by two 2.3 percent at the bottom.

The Indianapolis maintenance center, INC, we're running 926,000 above budget, and that's a triple to the new lease that we has uh was in effect on March 1st.

Um we're assuming that the we look at IMC revenues and expenses for that lease, the AR process whole.

So we have a net margin at zero there.

So that's the difference there.

And one other thing to point out at the bottom, uh, cargo landed weights for the first quarter, we were 11.5 percent below budget, 9.1% second quarter, and then the July, as I mentioned, 0.1%.

So we'll keep seeing what happens there.

Any other questions?

All right, we'll go to covering expenses, and um looking at personal services.

We are right now with budget.

Our biggest variances are in the contractual services, professional fees is the biggest right now.

That that relates to environmental and um PD on call services, staff augmentation fees that are just trending lower than we had thought.

And um, we did consider that when we were working on the 26th budget, that kind of looking at that level, and we did bump that down or where where we're running.

Um total supplies, we are just a little bit 139,000 above budget that we had some um underspending that's offset by the snow and ice chemicals um due to the weather and the first part of the year.

Uh total materials, we are over budget 119,000.

Uh that primarily relates to Jeff Bridge parts repair parts.

So at the bottom, we are approximately four million dollars under budget, and some of this could be timing, but like I said, we are looking at some um ways to take care of that out performance.

Next page is our non-operating stance.

We have CFC CSC's speaking about a budget.

And investment income, like he said, we are running ahead of budget there as well.

But the most important thing is at the bottom that that service coverage count of 1.73.

And that is well above our requirement at 1.25.

Question.

All right.

So the next um area is our um risk and opportunity analysis and take a look at the um where we think we might be at the end of this year compared to what we initially thought.

And um and plane passengers, we kind of with that that 675 uh number is where we are currently over on uh through July.

So for August through December, we just assume that we're gonna stay at budget levels.

Um cargo, we still think we're gonna be under budget for the year.

Um our non-airline revenues right now for parking retail relievers, those are our positive variances that can have from July, and we think those will be maintained throughout the year.

And then the Pan C will grow a little bit there because of their new lease expenses.

We think we might be a little bit over budget operate services because of that market rate study and maintenance tech fees that weren't included in the budget, and that'll be offset by some variable utilities that we have.

And um, like I said before, we're going to um anticipate spending some one-time investment um some of our out performance that we have this far.

So bottom of the uh piece though, all in on these ups and downs.

We we think materially we will stay in line, but um our whole budget questions okay for accounts for sequel.

Um this I just kind of want to focus on the the uh column in gray, the over 60 days, uh only 268,000 there.

And um, we have you know a great AR specialist, and they work um with our retail properties team and do a great job managing these accounts and um I don't know if there's any specific questions with any questions about accounts receivable okay and the last page um is the uh reserve for bad debt um at as of July 147,000.

Um 62,000 of that relates a bank one jet uh bankruptcy that happened a long time ago, and then we have another um just estimates in there to conserve the problem happen, but um, but as of July, we have no write-offs or anything, so I am thanks.

We just what's outstanding.

I mean recommend that you have the reports from now on.

She's not gonna sleep again.

Seriously, I was heard of anything you want to add anybody so far from a starter standpoint.

We are working through the requirements.

We are in compliance when we have you know things we have to do orderly, that type of thing.

So we utilize that second to last page in the packet that's up on the screen.

Also keep track of that.

Um this committee has probably the most technical number of uh items to maintain feedback or to review.

So thank you for your guys' contribution to this.

If we are there's nothing that won't get accomplished, uh I think we should still plan to have the November meeting.

Um that would be what I would say.

So Robert, um page 65.

Show the increase net position.

Then we show the debt service coverage.

Yeah, and uh I don't look at our arrangements for the fact it's just a philosophical question.

So it seems to me in determining the debt service coverage, that increase or decrease in net position shouldn't really be part of the equation.

It really should just be net income or loss from operations.

No, no depreciation.

So depreciation's the piece that causes there to be uh question governmental accounting.

We have all these grants.

That's not happening inside the four walls of our operations.

So you have that depreciation.

We end up a governmental entity also having all the assets of all the investments of our lessees.

Depreciating, right?

FedEx is one point some billion dollar investment in their facilities.

We have to query them, and it's part of the responsibility, reflect for the public the value of this airport system.

I look at that and say, wow, does that make it confusing?

You know, that that number.

But it is the that's why we have an approach, uh, this and discuss what the the expenses are, how it impacts airline rates.

That's all cash basis, all cost recovery.

So looking and navigating the financial, the audited financials versus what we're doing here, and that's why I don't leverage that bottom number.

Um, but the the relationship is or the requirement is a 1.25 coverage, and it is called an ordinance coverage, it's got calculations that are in it, and um it again being this uh strong in coverage is uh a result of our airline agreement, the non-airline revenues, and then also our approach to how we uh share revenue with the airlines or don't, and the revenue that we keep and then reinvest.

Uh airport system is a closed loop, what the FAA says, right?

Stay inside here, and then I'll go back to what Mario says, because he is right about even an airline incentive that ultimately when you take the long look, ultimately the airlines are paying for everything uh and or it is uh and it requires maybe changes over time, you know, for us to have uh and we're using interest income for doing the airline incentive, but in the next agreement, if we need more money for capital, well then we're gonna keep more parking revenue.

So the airlines are paying over the long term.

So, you know, I get real detailed, you know.

I'm like, wait, not this year, but no, long term they do.

So we have some very interesting conversation.

I've grown in my thought, and he was right.

So what are the things, and and you probably saw it during the first presentation during the board meeting.

It's incredibly important to understand that we have exceptional staff that we wouldn't be in the position that we are without this exceptional staff.

Went through COVID, never missed a beat.

You know, we have over 500 operating days of reserve.

I would challenge you to find another organization that has that private sector or public sector.

We raised in in our rates in our in our rating agency.

Rating agencies don't raise us, especially in very choppy times, economic times, and we've gotten up.

Our ratings have gone up, reduced our reserves, and we've eliminated that variable debt, which was synthetically fixed, which probably there's three people in Wall Street, a couple of people outside, including Robert that actually understand how this mechanism worked.

You know, I I find I think I'm very sharp when it comes to uh airport financial management.

I even wrote a little textbook on it.

He has to explain things to me.

And that was one of the things that you have to explain.

We got ripped over 350 million and fixed it.

So that you know, over if you look at it in the large picture, this is an exceptional staff, and they've done exceptional work over a decade.

So we got the best agreement in the airline industry.

So all of this is just a reflection of that and a reflection of the hex.

So any other business from the Manson Audit Committee.

Next meeting is November 21st.

Anything else from the committee claims?

Job?

Nope.

We're adjourned.

Thank you.