1 2 3 4 KERR COUNTY COMMISSIONERS COURT WORKSHOP 5 and 6 KERRVILLE/KERR COUNTY JOINT AIRORT BOARD MEETING 7 Monday, April 7, 2014 8 8:30 a.m. 9 Mooney International Aircraft Company 10 Mooney Operations Office 11 165 Al Mooney Road North 12 Kerrville, Texas 13 14 15 KERR COUNTY COMMISSIONERS COURT 16 TOM POLLARD, Kerr County Judge H. A. "BUSTER" BALDWIN, Commissioner Pct. 1 17 TOM MOSER, Commissioner Pct. 2 JONATHAN LETZ, Commissioner Pct. 3 18 BRUCE OEHLER, Commissioner Pct. 4 19 KERRVILLE/KERR COUNTY JOINT AIRPORT BOARD 20 STEVE KING, President COREY WALTERS, Vice President 21 ED LIVERMORE, Member BILL WOOD, Member 22 KIRK GRIFFIN, Member 23 MOONEY INTERNATIONAL AIRCRAFT COMPANY 24 TOM BOWEN, Chief Operating Officer CHAD NELSON, Chief Manufacturing Officer 25 BARRY HODKIN, Chief Financial Officer 2 1 I N D E X April 7, 2014 2 PAGE 3 Discussion regarding facilities and maintenance at 4 Mooney International Aircraft Company 3 5 Adjourned 28 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 1 On Monday, April 7, 2014, at 8:30 a.m., a joint 2 meeting/workshop of the Kerrville/Kerr County Joint Airport 3 Board and the Kerr County Commissioners Court was held at 4 Mooney International Aircraft Company, 165 Al Mooney Road, 5 Kerrville, Texas, and the following proceedings were had in 6 open session: 7 P R O C E E D I N G S 8 JUDGE POLLARD: This is the Kerr County 9 Commissioners Court. I'll call to order for the purpose of 10 having a workshop. We're beginning now at about 8:37 a.m. on 11 April the -- what is today, the 7th? -- 2014. We're in 12 Mooney International Aircraft. I'll turn the meeting over to 13 Commissioner Moser. 14 COMMISSIONER MOSER: Thank you, Judge. The Judge 15 and I had the opportunity to see what's going on here at 16 Mooney International, so I thought that this would be a good 17 opportunity, for those who haven't seen it, to take a look, 18 and that's the purpose of today. Can you hear me okay, 19 Kathy? Okay. And I think when I say "see," there's a couple 20 things, two aspects of that. Number one is see the 21 commitment of Mooney International in this facility. And 22 that commitment is demonstrated by several -- several ways. 23 Number one, the team that they have here, that they've pulled 24 together, with 82 employees -- is that correct? 85. 85 25 employees today, okay. So, just a mention of it, and I think 4-7-14 Mooney 4 1 when we talk you about commitment, it's the senior executive 2 team that they've put together, with Jerry Chen being 3 President/C.E.O.; Tom Bowen, Chad Nelson, Barry Hodkins -- 4 Hodkin. Who else did I have here that I'm missing? But, 5 anyway, those guys that have seen this, Tom has been here in 6 the past. He left; he came back. Barry's been here for a 7 long time; he stayed here for this entire thing. So, I think 8 when you see that, that's a commitment. Another commitment 9 that you'll see when you go through here is what you see 10 today. There's $200,000 worth of LED lighting in here. 11 There's $3 million worth of equipment that's being installed, 12 that's either in place or going to be in place this year. 13 There's another $3 million worth of equipment next year. So, 14 you can see that by the commitment here, that it's -- that 15 it's real. The production line is moving. First plane comes 16 off the production line in July -- is that right? And then 17 Tom has got an announcement too that's going to make it even 18 more exciting about what that first airplane -- what's going 19 to happen to it. So, I think if you look at that, you see 20 the commitment. 21 Then, okay, this facility is owned by the City and 22 the County, okay? The entire 300,000 square foot of stuff 23 here, plus the entire airport and all the facilities. So, 24 when you look at this, look at the facilities that we own and 25 what's inside of them -- what's inside of it Mooney 4-7-14 Mooney 5 1 International owns, but it's our -- it's -- what we have to 2 have is a commitment to make sure that this facility is 3 fixed, okay? It leaks like a sieve. So, we're going to show 4 you here, after -- I think what we're going to do next is Tom 5 Bowen or Chad or one of the guys here -- Barry is going to 6 tell you a little bit about what Mooney plans to do, and then 7 we're going to take a tour of the thing. But we're also -- 8 Chad will show -- and I did mention Chad, sorry, a while ago. 9 He's got a sample of a roofing material here. And what the 10 concept -- not concept, but the process for that, so 11 everybody can see it, touch it, feel it, and understand what 12 it is. So, with that, what we're going to do is we're going 13 to adjourn the -- the workshop and then take the tour, for 14 those that want to take the tour. 15 MR. BOWEN: All right. Thank you for coming, Tom, 16 Judge. We appreciate you pulling this together. There's 17 nothing like actually seeing the environment we live in every 18 day to really drive home some of the points that you probably 19 all have been talking about. I have a unique perspective, 20 because I've been in half a dozen production facilities in my 21 career, all the way from the Pacific northwest down to the 22 deep south, so I -- I have a kind of a unique perspective of 23 what it takes, facility-wise, to have a -- a robust, 24 predictable production line. So, Chad and I have talked a 25 great deal. Chad's actually going to walk you through these 4-7-14 Mooney 6 1 pictures on these boards here and give you a little bit of a 2 taste of the -- of the geography that you can tour after this 3 meeting if you like. We're going to run a tour, and he'll 4 tell you what you're going to see so that -- that way, when 5 you get to those work centers, you'll actually know what we 6 have planned with these work centers. The -- the commitment, 7 I can tell you, is at 100 percent, maybe 1,000 percent, 8 however you want to quantify it. I was -- you know, I had a 9 great career up in the Pacific northwest. We were building 10 these things called plastic airplanes; you know, 11 high-technology carbon fiber general aviation aircraft. But 12 it was because of the vision and the business plan that Jerry 13 Chen presented to me on the recommendation of the employees 14 to go out and find somebody to do what I do that convinced me 15 to come back after 12 years of being gone from Kerrville. I 16 came back. And that is part of the commitment, as Tom points 17 out. The other part of the commitment that you don't know 18 about, but we just announced in Florida this weekend, is that 19 that first airplane at the end of the line, which is the 20 first airplane that will be licensed, and -- and become 21 available for sale, we've had so many people contact us about 22 being the first -- being the person to buy the first airplane 23 off the production line that we really can't pick anybody to 24 be the owner of the first airplane. So, Jerry Chen and 25 Veronica Wong have decided that they are going to donate that 4-7-14 Mooney 7 1 airplane to a nonprofit. That nonprofit, which was formed a 2 couple of weeks ago, is called the Mooney Museum Corporation. 3 They're donating that airplane to the museum corporation. It 4 will be -- there will be an online auction held for that 5 airplane, and 100 percent of the proceeds from that auction 6 will be used as seed funding for the Mooney Museum. Now, the 7 Mooney museum is going to collect and preserve artifacts of 8 Mooney production. It's also in our charter that we address 9 and be the historical center for Kerr County aviation and 10 Kerrville Aviation, so it won't be Mooney exclusively. It'll 11 also be all of aviation in this part of central Texas. The 12 bidding opened on Saturday. It's an online, anonymous bid, 13 and there's a qualification process. Corey and Steve, I'll 14 walk you through it. (Laughter.) But it'll be open from 15 Saturday through July 11th. July 15th, we'll contact the 16 winning bidder, and that's -- the winning bidder will be 17 invited to the AirVenture air show in Oshkosh, which is our 18 -- which is our Super Bowl. And the airplane, that airplane 19 will be the centerpiece of our display, and -- and at that 20 event, we'll be presenting the keys to the winning bidder. 21 The airplane value -- retail value is a little over $800,000, 22 so it's a substantial commitment. And because of the -- 23 because of what that airplane represents, we expect the bids 24 to go much higher. Whoever is the winning bidder for that 25 airplane will actually be buying a significant piece of 4-7-14 Mooney 8 1 Mooney and Kerr County history. Also, the winning bidder 2 will be one of the three founders of the museum. So, when we 3 actually stand up a museum, which will be -- we think which 4 will be on site here, on our campus, but will certainly be 5 close, there'll be a plaque commemorating the three founders 6 of the museum, the third member being whoever the winning 7 bidder is. So, that was a big announcement Wednesday at -- 8 at Sun 'n Fun, along with our production rate this year. And 9 I'll let Chad walk through the numbers, the production rates, 10 and what we have planned for manufacturing. If we want to 11 move over to that area, we can also use those boards. I 12 don't have a lot of these, but y'all can play nice and share. 13 Make some notes on these, if you like. 14 MR. NELSON: Good morning. I'm Chad Nelson; I'm 15 the Chief Manufacturing Officer, so all things 16 manufacturing/supply chain belong to me. Most everything 17 under all the roofs that you see here are my concern. I was 18 asked to cover a number of topics this morning. So, I'm 19 going to just go down this whole list quickly. I'll start 20 with the roof, and say everything in the heavy outline here 21 is what we're proposing to reroof, and then I'm going to go 22 through the rest of what is either in work or what the plans 23 are. Then I'll come back to the roof at the end. 24 As far as facilities, a couple of things going on 25 right now, and you can see this morning as we walk around, we 4-7-14 Mooney 9 1 have two new restrooms going in, to the tune of almost 2 $150,000, back in the Hammer House and in the machine shop. 3 We probably qualified for among the nastiest restrooms in the 4 state of Texas, if not the entire country. They've been 5 completely ripped out, including the foundation, brand-new 6 plumbing, everything that hooks into the city sewer and from 7 there up. So, those are -- the concrete's in. The plumbing 8 is started, and the slab and the framing has been started 9 also, so that's real good news. Great employee morale item 10 right there, just to see those two new restrooms. 11 The lighting has already been mentioned. Actually, 12 the total bill for lighting is going to be $290,000. About 13 60,000 of that is the labor to install it. If you had been 14 in here even a week ago, this side was fully lighted, and 15 that side had not been started yet, and it was literally like 16 night and day. If you look down toward the far end there, 17 you can see the old fluorescent lights. If you go down there 18 and stand under them and then see the difference between what 19 we have here and what we have down there, it's tremendous. 20 The lighting guy that came in here to do the estimates for us 21 came with his luxmeter, and our average lux, whatever that 22 term means, was in the mid-teens throughout the factory. We 23 went as high as 19 and as low as 8 or 9. The ideal for an 24 aircraft factory, according to their charts -- of course, 25 they want you to buy as many lights as they can sell -- is 4-7-14 Mooney 10 1 75. It turns out our infrastructure here and our track, when 2 we took the old lighting out, would support 55 lux, so that's 3 what you have. So, you can imagine going from the teens to 4 the -- to 55. There's already some people that'd like tinted 5 glasses to go to work here. 6 But that's a huge benefit throughout the entire 7 manufacturing spaces; we'll have new lights. We already have 8 them in the machine shop and the weld shop. The Hammer House 9 is in such bad condition with the roof that we don't dare put 10 the new lights in. We're currently covering up all the new 11 machinery and most of the old machinery, just because the 12 roof does leak that bad. As far as equipment, we got a drop 13 bottom furnace that will be fully functional in July. It 14 will go back here in the back corner of the Hammer House. 15 Just a couple of notes on both the drop bottom furnace and 16 the process line. We have made a huge, huge step forward in 17 environmental consciousness, among other things, not only the 18 amount of gas used, but the -- the old heat-treat process; we 19 used salt bath heat-treat, which we kept that running at 20 upper 600 degrees 24/7. You can imagine the power usage, 21 plus the hot salt, if we had had any leakage, the 22 environmental issues associated with that. 23 The new process will be a drop bottom furnace. 24 It's also gas-powered, but we only turn it on when we use it, 25 and warmup is less than two hours. We run as many loads as 4-7-14 Mooney 11 1 we need to and we shut it back down. That's almost a 2 $700,000 investment in the drop bottom furnace. The process 3 line is where we do alodine; once again, big tanks of 4 chemicals. I had nightmares about that one. Happy to say 5 that we completely drained the process line, removed 6 everything, including the berm. We're going back in with the 7 plastic -- some type of poly tray that will cover the entire 8 water treatment plant and the process line. All brand-new 9 poly tanks, and a fully computerized system to -- to dip the 10 baskets to -- to go through the process. That's about 11 another -- between the process line and the water treatment 12 plant, almost $350,000 of new investment, and that's back in 13 the process building here. 14 CNC machinery; that's computer numerically 15 controlled. I finally learned what "CNC" means; I had to try 16 it out. Brand-new press brake, that's about a $190,000 17 investment that'll go back in the Hammer House. It's due to 18 ship today. Not only do we get a $190,000 piece of 19 equipment; we got another $40,000 worth of new tooling that 20 will replace four machines, and do it much more efficiently, 21 and it has a couple of benefits for the manufacturing side of 22 the house in that where we currently set up our old 23 machines -- a little aside here. I'm not sure why we needed 24 a museum; we've got one here. (Laughter.) But the old 25 machines will be set aside for the museum. Four of them will 4-7-14 Mooney 12 1 be replaced by this one CNC brake press. And because it's 2 computer-controlled, we'll be able to make as few as one 3 shipset at a time, where we currently are making 6, 8, 10, 4 even up to 40 or 50 of a single part, because of the amount 5 of setup time that's required to set up that machine. So, 6 huge benefit to the manufacturing process. 7 Similarly, a CNC practice mill, in my terminology, 8 it's a big old computerized drill press. It'll do everything 9 from wing spars to any number of other drilled parts. We're 10 replacing 15 manual drill presses with three manual drill 11 presses and this CNC practice mill to the tune of about 12 $160,000. 3D scanner arrived last week. We have a week of 13 training next week, and that'll give us great capabilities, 14 both in research and development and inspection, inspecting 15 finished parts, and also in the manufacturing process. We'll 16 be able to use it for shooting in jigs and numerous other 17 things; $200,000 investment there. As far as software, we're 18 installing solid workstations throughout engineering and 19 manufacturing/engineering, which will allow us to use 3D 20 modeling where we've used nothing but 2D paper prints for 21 just about everything for a number of years. We have moved a 22 little bit into 3D with some of the parts on the plant, but 23 this is a huge step forward. 24 The Amada machine has new software also, and 25 similar to what we're able to do with the CNC brake press, 4-7-14 Mooney 13 1 we'll be able to -- where we currently lead a sheet of a 2 certain type and specification of aluminum and have to make 3 whatever the smallest shear size of that aluminum, we may 4 make 50 or 60 of a part just because that's what fits on a 5 sheet of aluminum. Now we'll be able do what we call 6 nesting. If the airplane takes 16 parts that come out of 7 this particular kind of aluminum, we make one of each, so we 8 don't have a full warehouse full of inventory. So, all kinds 9 of real big benefits. I'm not even sure what the price tag 10 is on the software, but it's probably in the $100,000 range. 11 Right behind us here, we have a new ID machine that allows us 12 to ID all the parts in much more rapid fashion. It's the 13 same thing, computer-controlled, so it stores everything and 14 we don't have to reprogram it every time. 15 New decal machine gives us the same capability as 16 the software for the Amada machine. Where we used to produce 17 50, 60, 70, 100 of each decal, just because of the -- the 18 antiquity of our machine, we can now tell this particular 19 machine to produce one full shipset of every decal that's 20 required in an Acclaim or an Ovation, and we don't have to 21 store those either. So, all kinds of benefits coming out of 22 this investment that we've already seen. I was asked to talk 23 about production rate. Our current production rate is one -- 24 one plane per month, so every 20 days we move the assembly 25 line, every 20 working days. And so between now and 4-7-14 Mooney 14 1 December, we will produce six airplanes, the first one coming 2 out in July, and every 20 working days thereafter. 3 Starting next December, we will increase the 4 production rate to two a month, so next year our production 5 rate will actually end at 27. Two a month is not 27, but 6 that's just how the mathematics of it -- it's actually one 7 every 20 days, and so 27 airplanes next year. And 8 thereafter, six months later after we go to two a month, we 9 have programmed in an increase to three airplanes a month. 10 We can adjust that as need be. I will tell you that prior to 11 shutdown, we were moving the assembly line every four working 12 days, and six months prior to that, we were moving it every 13 two and a half working days. So, we have the ability to flex 14 with demand. So, the initial startup is slow and deliberate. 15 You can imagine that after five years of having this place 16 completely closed down, it's been a pretty monumental task to 17 get the right people and all the right equipment and get 18 everything going for the -- for the first iteration here. 19 Happy to report that at the end of the first 20 days, every 20 position moved, and we had a couple little issues, but the 21 line is moving quite smoothly, all things considered. Now, 22 back to the roof. 23 MR. BOWEN: Tell them the head count toward the end 24 of the year. 25 MR. NELSON: Head count currently as of this 4-7-14 Mooney 15 1 morning -- we brought in a new machinist -- is 53 in 2 manufacturing. Over the next 12 months, we'll add 47 3 additional people in the manufacturing spaces, and that's 4 phased into a need of two a month and then three a month as 5 we go forward. Any questions about any of that before I go 6 into the specifics of how we got to where we are today on the 7 roof? Okay. 8 MR. WOOD: I got a question, sir. Are you just 9 going to build an inventory of airplanes, or are you trying 10 to build them for people that are ready to buy them? 11 MR. BOWEN: Yes, we've had quite a nice reception 12 of retail purchase contacts. I'd say the list currently sits 13 at about 30 people who have contacted us about getting 14 current pricing. We didn't release pricing until last 15 Saturday at Sun 'n Fun, so that's my focus this week, is to 16 get those packages and contracts out to people. Our goal is, 17 by about Oshkosh time frame, you know, maybe fourth quarter, 18 is to have all of the production for next year sold. 19 MR. LIVERMORE: Wow. 20 MR. McILVAIN: Where would the museum be located? 21 Over on this side? 22 MR. BOWEN: We actually don't have a finite plan. 23 One of the ideas we've kicked around is the Building 17 -- 24 18? 25 MR. NELSON: 17. 4-7-14 Mooney 16 1 MR. BOWEN: That we've given back to the airport. 2 And the front part of this building is, I believe, you know, 3 condemned or scheduled for destruction, but there's a nice 4 hangar complex. So, one of the ideas was after this front 5 section is demo'd, there's a nice slab there that, you know, 6 could very well be a future site. But we anticipate 7 somewhere on the campus, this being the campus, that it would 8 be an ideal spot. Because associated with the museum, we 9 would also like to run regular tours through a gleaming 10 white, beautiful, sterile facility. 11 MR. MacCORMACK: One other question. What is the 12 production for next year? Just you so -- 13 MR. NELSON: 27. 14 MR. MacCORMACK: When he says to have all the 15 production for next year sold, that's 27? 16 MR. BOWEN: 27. 17 MR. NELSON: Six this year, 27 next year. 18 MR. MacCORMACK: Okay. 19 MR. NELSON: So, in the discussion of the roof, if 20 you just take a look at the facility here, I believe this 21 was -- the first building is a Quonset hut. That was where 22 Al Mooney and team built the wood wing, and the production 23 was focused in this area here. You can see that every one of 24 these buildings is attached, okay? And therein lies a big 25 part of our issue. Everywhere where there's a seam where 4-7-14 Mooney 17 1 buildings come together, we have massive leaks. Everywhere 2 where there's a seam, just 'cause they're old, we have leaks. 3 So, we have a variety of either a leak or a massive leak just 4 about everywhere there's a seam in this building, okay? 5 Everything from the ridge vent to the skylights to the seams 6 in the building were taken into account when we looked at how 7 we would approach fixing our issues here. 8 We had three different vendors come out, and we 9 looked at two methods of spray repair, we looked at a vinyl 10 repair, and then we looked at just replacing what needed to 11 be replaced, which from every roofing vendor became a -- 12 that's not an option, because you have to lift everything up 13 to seal everything if you don't know where every single leak 14 is. Some additional consideration we had, turning to 15 wintertime when it gets real cold, we have as much 16 precipitation inside, just because of the frost building on 17 the inside of the roof. Then the heaters come on, and 18 condensation drips all over the place also. So, we can make 19 it rain in here just about any way you want it to; we've got 20 our own little weather system in Mooney. 21 There's a couple of really, really big issues. 22 That's the seam that comes here where these two buildings 23 come together. There's a gutter that's 18 inches deep and 24 about 9 inches wide, and I think all that really serves a 25 purpose for is to hold water so that it can all drip into the 4-7-14 Mooney 18 1 Hammer House, okay? We literally close the Hammer House any 2 time we get over a light mist; there's so much potential for 3 injury in there, both from the water coming down, the water 4 pooling on the floor, and -- and the fact that the roof just 5 leaks like a sieve. So, what we're interested in is taking 6 care of the condensation problem, taking care of the leaks, 7 and having as long a lasting product as we can. So, I was 8 asked to explain to you the preferred method that we came up 9 with after having three vendors come out. This is a metal 10 roof. You put a styrofoam -- or foam insulation into the 11 trough on each one, then crosswise across the top of that 12 goes another layer of insulation, and then the entire thing 13 is covered with this -- I forget what they call it; I think 14 30-mil vinyl, but don't quote me on that. Fastened with a 15 tab underneath. You can see there it goes all the way 16 through. 17 MR. LIVERMORE: Does this go on this roof, or does 18 this roof come off? 19 MR. NELSON: Goes over the top of the existing 20 roof. 21 COMMISSIONER MOSER: Tell him, Chad, where the 22 existing roof is on this. 23 MR. NELSON: So, this is the existing roof. They 24 put the insulation layer with the trough, then crosswise, and 25 then they cover the entire thing. Now, these vinyl sheets, I 4-7-14 Mooney 19 1 think they said 10 of them will cover this, so they make it 2 in their factory, and they do the majority of the welding, as 3 they call it. They weld these plastic sheets together, and 4 you can see it's got a pretty -- pretty good weld, so it 5 minimizes the number of connecting points. Then they come 6 here and they weld on-site to weld together the seams here. 7 In addition, you see that as they roll it down, they've got 8 these tabs on the back, and that's where those fasteners go 9 through. Every 8 inches, there's a fastener. 10 The question was posed to me last week, "How do 11 they fasten it at the edge with the wind? How do you take 12 care of that?" And actually, when I called the salesman 13 back, his response was, "Let me tell you this first. During 14 the hurricanes in Florida, they've had a couple of buildings 15 that they think the roof is the only thing that held them 16 together, because the buildings around them went down, and 17 they have numerous of this particular method that stood up." 18 It just so happens that today in Kerrville, Denny's is 19 starting the installation of this type of roof on their 20 building in town, so if anybody's interested, you can see 21 what's going on there. The way they decide how they fasten 22 it down is, they did a Kerrville wind study -- or they took a 23 Kerrville wind study, and that dictates, for instance, that 24 where it comes down over the edge, it either goes into the 25 gutter and is fastened every 6 inches on center, or if there 4-7-14 Mooney 20 1 is no gutter, it goes into the facie, and then they have a -- 2 what he called the termination bar over the top of that. 3 But either way, it comes over the edge of the roof, and every 4 6 inches on center, they fasten it. So, it's -- it's 5 scientifically determined how they fasten it based on the 6 wind conditions for your particular location. The company is 7 Ultimate Roofing Systems, and they do have a pretty good 8 history in the local area, numerous schools and hospitals in 9 San Antonio, and they have provided a bunch of brochures 10 about their product. Also, this is -- this is the 30-mil 11 vinyl. As can you see, I'm a weakling, but I can't pull it 12 apart. If anybody would like to -- 13 COMMISSIONER BALDWIN: Here, Bruce. 14 JUDGE POLLARD: -- tear it apart? Bruce? Go ahead 15 and do it, yeah. 16 COMMISSIONER OEHLER: Can't do it. 17 MR. NELSON: So, if there are no questions, I'll -- 18 COMMISSIONER MOSER: Tell them about the warranty. 19 MR. NELSON: Oh, good. The warranty on this 20 particular product is 30 years, parts and labor. The next 21 closest warranty we found was for a spray-on product, which 22 was five years, and that was parts only, no labor. 23 MR. MacCORMACK: How much square footage are you 24 talking about for all the roofs? 25 MR. NELSON: I'll have to -- I'll have to refer to 4-7-14 Mooney 21 1 the quote. I can't remember off top of my head. 2 COMMISSIONER MOSER: Like, 300,000 square feet. 3 JUDGE POLLARD: Yeah. 4 MR. NELSON: The bid for this particular product is 5 965,000 to cover 18 of the 21 roofs here. The only roofs 6 that we will not -- we did not have quoted was the sales 7 building, the welcome center, and then there's one little 8 tiny block house out here that has a concrete roof that 9 doesn't -- 10 (Low-voice comment made off the record.) 11 MR. NELSON: There's numerous ways. We'll see it 12 especially in the Hammer House and in the maintenance areas 13 where the wood is in really bad shape, anywhere where the 14 wood has to be replaced. Everything that they could see had 15 to be replaced from looking from the bottom inside is in the 16 quote. There is a clause in there that if it exceeds a 17 certain percentage of the roof, then there will be additional 18 charges in those areas where there's wooden roof. 19 COMMISSIONER LETZ: The warranty is the material? 20 Is the material -- who manufactures the material, and does 21 the warranty cover the manufacturer or the company that 22 installs it? 23 MR. NELSON: I would have to go back into -- 24 MR. WALTERS: Usually it's the manufacturer. Like 25 Firestone, they use it with this warranty. Not the labor 4-7-14 Mooney 22 1 warranty, maybe, but it's usually the manufacturer's 2 warranty. 3 COMMISSIONER LETZ: My question is basically, who's 4 the manufacturer? Firestone? 5 MR. WALTERS: Firestone does do a bit. 6 (Low-voice discussion off the record.) 7 JUDGE POLLARD: When you're talking, stand up, 8 please. The reporter's trying to take this down. 9 MR. LIVERMORE: How long will it require to 10 complete this job from start to finish, and will it interfere 11 with your ongoing work during that period of time? 12 MR. NELSON: It will have no effect whatsoever on 13 our work. We can continue, with the exception of the 14 hammer -- you know, they're having to rip out of sections of 15 the wood. Or when they have to rip out sections of the wood, 16 we'll have areas that we'll have to schedule around. And I 17 believe the start to finish is about 120 days. 18 MR. WALTERS: Did they tell you what the R-value 19 is? Insulation value of that roof? 20 MR. NELSON: I don't have that on the tip of my 21 tongue, but it is in the package. 22 COMMISSIONER BALDWIN: Length of life? 23 JUDGE POLLARD: Well, it's a 30-year roof. 24 COMMISSIONER BALDWIN: Thirty years? Is that 25 what -- 4-7-14 Mooney 23 1 MR. NELSON: Fifteen-year warranty. So, I don't 2 know if they have determined what the lifespan is, because 3 it's a relatively new product. 4 COMMISSIONER BALDWIN: You could tell us; we're 5 friends. 6 MR. NELSON: I don't know. I did provide a copy of 7 the full quote with -- there's four different -- four 8 different proposals in there with varying degrees of how much 9 roof gets covered, and the -- the different specifications. 10 MR. LIVERMORE: Are these the people who will 11 install it? 12 MR. NELSON: Yes. One additional item. You notice 13 the number of skylights in here? Skylights are right around 14 $400 each to -- to replace and work into any one of these 15 roofing systems. Didn't matter which company; it was in the 16 vicinity of $400 per skylight. We made the determination 17 that based on all we know about this building, and the fact 18 that hopefully we'll get busy enough that we're going to need 19 a second shift, we invested in the lighting. The skylights 20 will be completely covered up in this -- in this process, and 21 that takes away a big leak factor, and it also protects our 22 lighting. Also the ridge vents in this building would be 23 completely covered up. It hasn't functioned for years except 24 for all the leaks blow up the roof and make a nice line down 25 the center of the building. They made a number of 4-7-14 Mooney 24 1 recommendations from the various companies, but that's our 2 plan, is to cover up skylights and cover up roof vents. 3 COMMISSIONER OEHLER: Can you cover up the 4 skylights without having to remove them and replace them? 5 MR. NELSON: They will cover them with plywood, I 6 believe. They will have to cover them, because then if you 7 go walking across the roof, you got potential problems. 8 JUDGE POLLARD: Could fall through the roof. 9 MR. NELSON: But they are covered, and then covered 10 with that. 11 COMMISSIONER BALDWIN: There are -- go ahead. 12 MR. WALTERS: I was just going to say Duro-Last. 13 COMMISSIONER BALDWIN: There are four bids in the 14 packet, and you recommend one? 15 MR. McILVAIN: There's four variations in this 16 particular company's bid, yes, sir. The -- the recommended 17 one is the one that does 18 of 21 buildings. 18 COMMISSIONER BALDWIN: Okay. 19 (Low-voice discussion off the record.) 20 MR. NELSON: Hopefully the doors are closed. We do 21 have -- you can see we have some gas heaters throughout the 22 building. I didn't actually mention, one other item that has 23 both the environmental impact and -- and hazard impact is 24 we've removed the boilers. We haven't removed them; we've 25 taken them completely out of the system. We used to use 4-7-14 Mooney 25 1 steam for the process line heat, and also detail paint. We 2 put in electric explosion-proof heaters and detail paint, and 3 then the process line area, we no longer have the boiler to 4 deal with. That was a 4-inch gas line that ran pretty 5 consistently, so that'll be an improvement also. 6 COMMISSIONER MOSER: Okay. 7 JUDGE POLLARD: If there are no further questions, 8 I think what we'll do is recess -- or go ahead. 9 COMMISSIONER MOSER: Before we do, if it's okay, 10 I'd like to get Jonas Titas just to give a brief summary. 11 He's done an economic development analysis and a report on 12 what this -- what Mooney has presented here today by Tom and 13 Chad, and just mention what it means to the entire community. 14 And while he's doing that, I just wanted, for the record, to 15 say that the Airport Board is here today, and I think we've 16 got every member of the Airport Board here. And also, I want 17 to introduce a -- a new member of the community, Jack Lousma. 18 Jack was the commander of the third shuttle flight; relocated 19 or now has moved to Kerr County. So, this continues to be 20 the best place in the world to live for those people who've 21 been out of the world. 22 MR. LIVERMORE: Pretty good. 23 MR. TITAS: We're passing around a further 24 direction of the Commissioners Court we ran an economic 25 impact analysis on the number of jobs and the investment that 4-7-14 Mooney 26 1 Mooney is -- is undertaking in our community. And 2 unfortunately, we only printed out 17 of those, so some of 3 you might have to share. It has been e-mailed to a lot of 4 you. But basically, what the report demonstrates is -- is 5 the significant benefits that we as a community will reap 6 from this level of employment and investment in new plant 7 facilities and wages, and that drives our local economy. And 8 if you look on Page 2, and if you add up all of the -- all of 9 the net impact that we'll receive as a community when you 10 look at the salaries, taxable sales, new residential property 11 for -- that's an indirect impact for employees that are 12 purchasing homes, and the assets of the -- of the company, is 13 you get about a $232 million economic impact to our area over 14 10 years. If you look on Page 3, you'll see that the County 15 can glean about $1.7 million of direct new revenue which we 16 were not otherwise benefiting from. On Page 4, you see the 17 net benefits to the county, which is about 1.6 million. And 18 then if we consider looking at splitting the cost with the 19 City for the new roof, and you look at the investment and 20 your annual rate of return, that investment will pay off in 21 four years with a 34 percent annual rate of return. With 22 that, any questions? 23 MR. NELSON: I just was going to make one more 24 comment. Those of you who may have read "WIT DOOM" down the 25 side of my board, that doesn't have any to do with the roof. 4-7-14 Mooney 27 1 Those are the seven deadly wastes that affect manufacturing, 2 so nothing to do with my presentation here. This is my board 3 for every morning for the employees out here. So, waiting, 4 inventory, transport, defects, overproduction, 5 overprocessing, and motion are the seven deadly wastes we're 6 trying to -- to get away from. But not roofs. 7 JUDGE POLLARD: Does Charlie have a presentation 8 too? 9 MR. McILVAIN: No. I will -- I will make one 10 announcement, that we appreciate Mooney agreeing to do tours 11 for our -- our fly-in, which is scheduled for May 10th and 12 11th. So, in fact, we're -- all our promotional material, we 13 used Mooney Aircraft as our -- as our airplane that's in our 14 promotional activities, and we'll even get some of those 15 posted out. 16 MR. BOWEN: We have a couple of them. 17 MR. McILVAIN: I thought you probably already had 18 them. That's May 10th and 11th. So, we also would like to 19 encourage everyone to come out the evening of May 10th, and 20 that's Mother's Day weekend, but we will have a hangar dance 21 with a group called Men in Black, which is local 22 entertainment, that evening. It's open to the public. 23 JUDGE POLLARD: Okay? Is that all, Tom? Okay. I 24 think we'll recess this now for the tour through the plant. 25 COMMISSIONER MOSER: Meeting adjourned. 4-7-14 Mooney 28 1 JUDGE POLLARD: Meeting adjourned. 2 (The meeting/workshop was adjourned at 9:21 a.m.) 3 - - - - - - - - - - 4 5 6 STATE OF TEXAS | 7 COUNTY OF KERR | 8 The above and foregoing is a true and complete 9 transcription of my stenotype notes taken in my capacity as 10 official reporter for the Commissioners Court of Kerr County, 11 Texas, at the time and place heretofore set forth. 12 DATED at Kerrville, Texas, this 8th day of April, 2014. 13 14 JANNETT PIEPER, Kerr County Clerk 15 BY: _________________________________ Kathy Banik, Deputy County Clerk 16 Certified Shorthand Reporter 17 18 19 20 21 22 23 24 25 4-7-14 Mooney