Agendas and Minutes

Airport Commission (View All)

Regular Monthly Meeting

Tuesday, January 06, 2004

January 6 2004


1. CALL TO ORDER: 10:00 AM
2. APPROVAL OF MINUTES: December 9th minutes approved with changes.
3. Public Forum:   Cindy McLaughlin, Sky Research, wanted to remind members that the foggy season is upon us and the airport use from Fed Ex and UPS will increase. Skinner will try to keep the airfield organized to keep conflicts at a minimum. Westerman asked if a press release would be appropriate to educate residents of the importance of the airfield for fog relief. Skinner has allocated one area of transient parking for these businesses and all signage is up directing them.
A. T-Hangar Proposal Updates
Staff received four proposals on the T-Hangars; Adroit Construction, Eric Artner Construction, Steel Tech Industries and Cubit Construction. Staff has been reviewing the proposals. The costs are very competitive.

Financing has yet to be decided and Olson will work with Finance to find cost savings within the proposals. Savings can be made by reducing the concrete slab width from 6 to 4 inches. The material underneath is an 8 inch rock base which is more than adequate to support the hangars.

The Commission asked about the proposed cost for the clamshell electric doors; these doors would increase the cost anywhere from $10,000 to $19,000 a piece. The hangars do include mandoors in the front. All agreed that clamshell doors are a better image and value, but the cost can not be justified. The clamshell doors are also a larger liability. The sliding doors leave gaps that allow birds to fly in and nest in the hangar. DeBoer asked Olson to request the hangars be sealed so that birds could not fly in to nest. There was concern that the sliding doors would cause a problem with neighboring hangars. When the doors are slid open, they store in the front of the next hangar so that hangar could not be opened. Skinner feels this is a common courtesy that the renters will work out.

Meters could be grouped instead of having separate meters in each hangar. The hangars could be billed a minimum $5 charge each month as part of their rent. Olson estimated maybe a $10,000 saving by grouping the meters. This will lessen the conduit, materials and labor.

Three fire hydrants were required by the Fire Marshall which will perpetuate the need for a six inch water line installation. City will do the site work and installation. Costs will be added to the amount of the loan.

Pre-Paid Rental Leases

Brown had prepared a memo discussing the proposals and the financing options (excerpt below):

1. With these 14 City built t-hangars fully rented for $220/month, the annual revenue would be $220 x 12 mo. x 14 units = $36,960 less the 25% FBO collection fee, for a total annually of $27,720. Estimating a total cost of $400,000 for the T-hangars, permits, fire hydrants, etc – the payback will be just under 15 years (assuming simple annual payback with no inflation, escalations or maintenance costs). I’d recommend a maintenance reserve in the airport fund of 8% annually so that it will build over time. With that, the payback is 15.6 years.
2. The next step is obtaining funding. Lee Tuneberg is looking at local funding options. We had initially intended on $300,000, so our costs are a bit higher. He will evaluate these options and we will present them to Council for approval on January 20, 2004.
3. We also need to look at prepaid hangar rentals. I had touched on two options previously and would like to have you approve the following three options for pre-paid leases at the next Airport Commission meeting on January 6th:
1) A 15-year prepaid lease for $220/month or a total of $39,600. This option would have NO collection fee for the FBO and the rental rates would not be charged for 15 years, and could be subleased ONCE over the life of the pre-paid lease.
2) A 10-year prepaid lease for $220/month the first 5 years and $242/month the second 5 years for a total of $27,720. This option would have NO collection fees for the FBO. The rental rate would NOT be charged for 10 years and could be subleased ONCE over the 10-year life of the lease.
3) A 5-year prepaid lease for $220/month escalating 2% each year for four years following the initial lease period – or a total of $13738. With this option, there would be NO collection fees by the FBO. The rental rate would NOT be charged for 5 years.
Non prepaid leases would be on a lottery system managed by the FBO. Once the hangars are at 95% complete, the FBO would collect final names and announce the lottery for the following Commission meeting. Names would be selected and the new lessee would have 15 days to make the first monthly payment. It is anticipated that the hangars will be complete in May 2004. It is anticipated that the initial hangar lease rate of $220/month would be in effect for the 2004/05 fiscal year through June 30, 2005; and would likely rise between 3-5% annually and would not be subject to the CPI cap.
For our financing purposes, I will assume 3-4 fully paid pre-paid leases, and local funding.
Details of the leasing can be worked out later.

The Commission looked over the above recommendations in the memo. The waiting list is maintained by Skinner Aviation staff. There should be an objective fair way to chose who will have first right of the hangars. Thompson felt the Commission should set the rent prior to hangar allocation and that the rent depends on the loan amount so that should be decided further into construction. The commission accepted most of the recommendations by Brown but did want to delete the fourth bullet.

Hangar rental vacancies will need to be advertised. The commission felt strongly that a hierarchy which respects the waiting list participants be established. The list has potential renters that have waited years for vacancy. Renters who utilize the monthly tie-downs have been approached by Skinner to be added onto the waiting list and have declined. They will need to sign the list to have the same opportunity for the first choosing.

Skillman moved to choose the manual sliding doors and to adjust the proposal for a mass electrical meter instead of individual meters; a $5.00 charge for electricity will be added to the monthly rental rate and a clause will be added to the lease language.
Seconded by Hendrickson, vote was unanimous in favor of the motion.

Westerman moved to establish the following selection priority for the new hangar rentals:
Pre-paid leases will have priority over all other; current tenants in the closed hangars followed by current renters in open hangars; then waiting list participants who have been on the waiting list prior to January 6, 2004. Once those people are offered hangar space any remaining hangar vacancies will be on a first come first serve basis. Seconded by Skillman. The commission voted seven in favor and one abstention due to conflict. Motion passed.

B. Commercial Use Rate Discussion
Lamb had cold called sixteen airports to research their approach to commercial rates and facility upkeep costs. Six of these airports have increased hangar rates for the commercial operators. Three increase commercial operators fuel flowage and other airport use fees. Two airports conduct audits or charge a square footage fee which incorporates the “impact area” which includes ramp and parking areas. Two airports have done similar rates to our SASO rates. The majority of the managers were very supportive of our ideas and are anxious to see the response. Their main concern is deterring future businesses by overcharging. It was suggested a few times that after we establish the fee system that we share the concept with ODA for other airports to follow.

Skillman supported the factor rate and felt an incremental increase depending on category of SASO would be fair. If rate is too much do a .11, .12 then .13. DeBoer and Rostykus revisited the 10% option. DeBoer felt that a SASO rate should be 1.0 for a hangarkeeper and 1.6 for all other SASOs. Rostykus proposed a the factor of 1.0 for all SASOs. Maybe the use of a hangarkeeper on the facilities will be less than a hangar using the airport for a full blown business. This was discussed further by the commission to determine what kind of business would use what facilities.

Zeve moved to adopt a factor of 1.0 for hangarkeepers and all other SASOs are to pay a 1.6 factor. Motion seconded by Stockwell. Skillman, Zeve, Thompson, Westerman, Stockwell, and Hendrickson are in favor, DeBoer abstained due to personal conflict, and Rostykus voted no. Motion passes.

C. AIP Process Update from Jim Olson
Three proposals were received for the AIP project engineering. David Evans Inc., W&H Pacific and Century West Engineering. The FAA is acceptable of all applicants. There is a $600,000 federal grant to upgrade the lighting, repair the apron, add another section for the tie-downs and install a washrack. Olson informed the commission that there may need to be a decision on what can be cut. There is not enough funding for all of the projects.

Olson will present solid numbers at the next meeting and commission should be prepared to decide what priority the items have if one or two need to be cut.

A. Financial Report on Airport Revenue as Requested
Postponed until February due to time constraints.
B. Liaison Appointment
DeBoer informed the Commission that the liaisons for commissions have been reassigned. The Airport Commission liaison will remain the same.
A. Status of Airport, Financial Report, Review of Safety Reports
Business is at it’s wintertime lull. Skinner asked is staff could contact Parks about the weeds to do some pre-eradication.

The replacement spare beacon is being used until the regular beacon returns from being repaired. Skinner will call ODA to see if there is a beacon support program. The beacon is only two years old and we already spent half of the cost of a new beacon for repairs. If the commission would like a new beacon the Electric Department would want some direction and time to find a better built beacon. Skinner will report back on what he finds from the ODA.

Meeting adjourned at 11:40 AM

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