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HomeMy WebLinkAbout109-06 RESOLUTIONRESOLUTIONNO. 109-06 A RESOLUTION AUTHORIZING AIRPORT STAFF TO APPLY FOR AND ACCEPT TWO (2) SAAG GRANTS IN THE AMOUNT OF $250,000.00 EACH FROM THE ARKANSAS DEPARTMENT OF AERONAUTICS TO FUND A PORTION OF THE COST TO CONSTRUCT TWO (2) CORPORATE HANGARS AT THE FAYETTEVILLE MUNICIPAL AIRPORT; APPROVING THE FINANCING PLAN TO COVER THE CITY'S MATCH OF $700,000.00; AND AUTHORIZING THE MAYOR TO IMPLEMENT THE NECESSARY BUDGET ADJUSTMENTS TO EFFECTUATE THIS RESOLUTION. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council of the City of Fayetteville, Arkansas hereby authorizes Airport staff to apply for and accept Two (2) SAAG grants in the amount of $250,000.00 each from the Arkansas Department of Aeronautics to fund a portion of the cost to construct two (2) corporate hangars at the Fayetteville Municipal Airport. Section 2. That the City Council of the City of Fayetteville, Arkansas hereby approves the Financing Plan to cover the City's match of $700,000.00, with repayment over 15 years at a 5% annual interest rate on the declining balance. Section 3. That. the City Council of the City of Fayetteville, Arkansas hereby authorizes the Mayor to implement the necessary budget adjustments to���� ��, ��..��RKI effectuate this Resolution. TREys.,, • PASSED and APPROVED this 6th day of June, 2006. APPROVED: By DAN COODY, Mayor ATTEST. O. •%U= •FAYETTEVILLE• 3 S. �=zs'�RKA*,•(J?' WING. ds Go.. By: M S NDRA SMITH,�Clerk Y ''iiuJ J t)%' `" 4 1 Ray M. Boudreaux Submitted By City of Fayetteville Staff Review Form City Council Agenda Items Contracts 6 -Jun City Council Meeting Date Aviation & Economic Development Division Action Required: n 611/ 6/66 /0? 506 CtranntS/ Oorp tV N aittr5 General Government Department Approve two applications to the Arkansas Department of Aeronautics for Grants in the amount of $500,000. Approv grant acceptance contingent on Dept Aeronautics Commission approval. Approve the financing plan for the City of Fayetteville to provide $700,000 match to construct two (2) hangars at the West -side General Aviation Apron. Approve Budget Adjustments. REVENUE $500,000.00 Cost of this request 5550.0955.6805.00 Account Number 06023 Project Number Budgeted Item 128,437.00 Category/Project Budget Funds Used to Date 128,437.00 Remaining Balance Budget Adjustment Attached West GA Hangars Program Category / Project Name Airport Revenue Program / Project Category Name General Fund / Airport Fund Name Being developed Departmen lirector ate sizzio6 City Attorney l Finance and Internal Service Director Mayor Comments: cs-x.3.06 Date Date Previous Ordinance or Resolution # 6 3 a Oh' -Lb .014 to tovi Z.£ - Original Contract Date: Original Contract Number: Received i Received in Mayor's Office City Council Meeting of: June 6, 2006 Agenda Item Number: CITY COUNCIL AGENDA MEMO/STAFF CONTRACT REVIEW MEMO TO: Mayor and City Council THRU: Staff/Contract Review Committee FROM: Ray M. Boudreaux, Director, Aviation and Economic De elopment DATE: May 17, 2006 SUBJECT: Approve application and acceptance of two (2) $250,000.00 Arkansas Department of Aeronautics, State Airport Aid Grant (SAAG) grants for a total amount of $500,000.00 and approve the financing plan for the City of Fayetteville $700,000.00 match to construct two (2) Corporate Hangars on the new West Side General Aviation Apron. RECOMMENDATION: Approve application and acceptance of two (2) SAAG Grants totaling $500,000.00 and the financing plan to cover the $700,000.00 City of Fayetteville match for the construction of two Corporate Hangars adjacent to the new West Side General Aviation Apron. Signature of the Mayor. BACKGROUND* All Airport hangars are full. Our Airport continues to grow at an unprecedented rate, mirroring the entire region. One recently vacated 9,000 square foot hangar garnered three potential tenants. We have signed leases for the two new hangars we want to build. Recently, we were able to convince the FAA Contract Tower Department to lower our cost share for the Air Traffic Control Tower (ATCT) due to the unprecedented growth In April, the airport was selected Arkansas. Airport of the Year by the FAA District Office in Ft. Worth, TX for management of the growth and successful rebirth as a General Aviation Airport. We need to continue this momentum. While we have successfully changed from commercial to general aviation, the fact that we were primarily a commercial airport means that we need to play catch up development to build the general aviation infrastructure needed to support the citizen and transient aviation customer. We need the buildings to continue to grow activity and based aircraft. A secondary purpose, but equally important, is to take advantage of the economic growth of the region today to contribute to the cash flow needed to sustain the airport financially. More facilities for aircraft --more cash flow to the airport. The Mayor, the City Council, the Airport Board and the Airport staff are committed to redevelop our airport into the first class general aviation airport that it is capable of becoming. With continued development like these new hangars, it is eventually possible to make the airport self sustaining in terms of cash flow. We have an opportunity now to leverage State grant dollars and need additional capital investment to help. Aviation and Economic Development Department Fayetteville Municipal Airport, Drake Field 4500 South School Avenue, Suite F Fayetteville, Arkansas 72701 Ray M. Boudreaux, Director Our investments thus far have purposefully been tied to future growth and revenue development. A ground lease to construct a hangar is possible but most investors are unwilling to build a building on property they do not own. While ground leases produce activity and based aircraft, they produce very little revenue At $.07 per square foot per year for a long term ground lease, each building would contribute $950.00 a year. There is additional revenue with each additional aircraft based at the airport in the terms of fuel flowage fees and reductions to the Tower cost share, but the budget impact of ground leases is minimal. A financing package that includes State Grant funds and City of Fayetteville General Fund or Economic Development Project financing would result in acquisition of the buildings providing additional aircraft on the field consuming fuel and contributing to the tower count and substantial cash flow to the Airport Fund. The Airport staff recommends developing a loan from City of Fayetteville resources for the remaining $700,000 to construct these two hangers. The loan is proposed to be amortized over fifteen years at a fixed rate of 5%. Airport staff has commitments for these two hangers that will generate approximately $7,600 monthly. This rent revenue is sufficient to fund the loan amortization and provide an additional $2,000 monthly for Airport operations. The situation in a list: • All hangars are full and we have a waiting list • Future growth is predicted @ approximately 10% a year • We have momentum • There are local competitors who will fill the void if we don't • We need additional cash flow to pay our cost allocation • The opportunity exists now for $500,000.00 in SAAG money • Several aviation businesses are interested in leasing the hangars • The airport must prepare for future growth needs • As a former commercial airline facility, the airport has minimum GA infrastructure, and thus, must play "catch-up" development. • Hangar development is costly and is not Federally funded DISCUSSION: Over the last four years Fayetteville Municipal Airport, Drake Field has successfully developed into a first class General Aviation Airport. We have increased activity, based aircraft, fuel sales, employees on the field, hangars, ramp space, taxiways and significantly improved our reputation in the industry. We have created an environment where everyone wants to be part of the success. In every step, we have considered the impact of our actions on the budget and our ability to fully fund the 0 & M Budget. Last year Million Air became the Fixed Base Operator for Drake Field to provide services for fuel, customer and line service. They are in the process of investing in the remodeling effort currently underway at the Terminal. The contract with Million Air allowed us to eliminate three staff and the budget that supported the City managed FBO operations. It also reduced the revenue from sales to a flowage fee and rent but we anticipate that this change will result in a net positive to the Aviation and Economic Development Department Fayetteville Municipal Airport, Drake Field 4500 South School Avenue, Suite F Fayetteville, Arkansas 72701 Ray M. Boudreaux, Director budget. The attached chart reflects the steady decline in budget deficit over the last four years. We have projected 2006 where you will note the reduction in revenues and expenses due to the new FBO arrangement. The Hangar Construction Project will increase Airport Fund revenues by $24,000.00 a year in rent and depending on the aircraft that finally locate in the buildings, an additional $2,500.00 to $5,000.00 annually in fuel flowage fees. BUDGET IMPACT: We have the opportunity to leverage $500,000 00 in State 50/50 SAAG grant funds. We need to finance $700,000.00 in grant matching funds at 5% for 15 years. Funding for the Engineering and Construction management, Task Order #14, with MCE for $105,450.00 will be paid out of the Airport Fund. The lease revenue from the hangars will pay the debt service and provide approximately $24,000.00 cash flow to the airport fund. With this project and other actions being considered by the Airport Board in Strategic Planning sessions, Airport Staff projects significant reduction in the projected deficit for FY 2007. Attachments: Staff Contract Review Form Budget Chart 2001-2006 Grant Applications Aviation and Economic Development Department Fayeneville Municipal Airport, Drake Field 4500 South School Avenue, Suite F Fayetteville, Arkansas 72701 • Ray M. Boudreaux, Director FAYETTEVILLE THE CITY OF FAYETTEVILLE, ARKANSAS DEPARTMENTAL CORRESPONDENCE TO: THROUGH: FROM: • DATE: SUBJECT: Mayor and City Council Stephen Davis, Finance & Internal Services Directo Marsha Farthing, Interim Finance & Intern*Services Director Kevin Springer, Budget Manager? May 23, 2006 Financing options for two Corporate Hangars Background Airport staff has submitted an agenda item requesting approval of two Arkansas Department of Aeronautics State Airport Aid Grants for a total of $500,000, with a $700,000 cost share loan from other funds of the City, to build two corporate hangars at the Fayetteville Municipal Airport. The proposal from Airport staff recommends a 15 year loan at 5% annual interest. This memo addresses the vanous financing options available to fund the $700,000 loan requested from other City funds. Options 1) One option is to allocate resources from General Fund using current available fund balance. The monthly payback for a $700,000 loan @ 5% would be $5,535.56 ($66,426.72 annually). 2) A second option is to use a portion of the remaining $2,364,327 in Wilson Springs funds designated for economic development to fund the loan. These finds could also be used to finance the total $700,000 cost match for the hangars without using a loan. 3) The Sales Tax Capital Improvements Fund can be used for financing the project using a loan or to pay for the total cost share. Since all Sales Tax Capital Improvement funds have been identified for specific projects, a decision will need to be made on which project or projects would be delayed or removed from the CIP to fund the loan or payment for airport hangars. 4) A final option would be to issue Amendment 65 revenue bonds in the Airport Fund to finance the project. 1:\Dcbt Financing\AirportLoan2006.doc • RESOLUTION NO. A RESOLUTION AUTHORIZING AIRPORT STAFF TO APPLY FOR AND ACCEPT TWO (2) SAAG GRANTS IN THE AMOUNT OF $250,000.00 EACH FROM THE ARKANSAS DEPARTMENT OF AERONAUTICS TO FUND A PORTION OF THE COST TO CONSTRUCT TWO (2) CORPORATE HANGARS AT THE FAYETTEVILLE MUNICIPAL AIRPORT; APPROVING THE FINANCING PLAN TO COVER THE CITY'S MATCH OF $700,000.00; %AND APPROVING BUDGET ADJUSTMENTS RECOGNIZING THE GRANT REVENUES BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council of the City of Fayetteville, Arkansas hereby authorizes Airport staff to apply for and accept Two (2) SAAG grants in the amount of $250,000.00 each from the Arkansas Department of Aeronautics to fund a portion of the cost to construct two (2) corporate hangars at the Fayetteville Municipal Airport. Section 2. That the City Council of the City of Fayetteville, Arkansas hereby approves the Financing Plan to cover the City's match of $700,000.00. Section 3. That the City Council of the City of FayettevilleArkansas hereby approves Budget Adjustments recognizing the Grant ReV utsY PASSED and APPROVED this 6th day of June; 2006. ATTES APPRO Al C'O'ODY, Mayor By (city Cterk CITY OF FAYETTEVILLE FAYETTEVILLE MUNICIPAL AIRPORT AIRPORT OPERATING DEFICIT 2001-2005 Operating Revenue Rents & Leases Aviation Fuel Contract FBO FEMA Reimburse Miscellaneous Total Operating Revenue: Operating E,enses Personnel Materials & Supplies Aviation Fuel Purchases Services & Charges Cost Allocation to General Fund Maintenance Operating Capital / Equipment ATC Tower Costs Total Operating Epense Change to Fund Balance from Operations Annual Percentage Change Cumulative Reduction of Ops Deficit Since 2001 2001 Actual 2002 Actual 2003 Actual 2004 Actual 285,146 287 035 319135 374,643 162 489 499,471 713,711 802,711 15,110 3,466 16,481 28,411 33,398 2005 Actual 407,191 753.846 15,204 42,707 431,101 802,967 1,061, 257 1,225862 1,218,948 276,468 3,929 115,390 167,072 137,724 49,401 10,784 312,807 12,464 320,641 179,982 144,612 48,874 25,206 360,960 34,777 464,840 239,191 144,612 55,833 385,841 335,755 27,416 29,141 585,989 571,919 246,273 200,980 151,800 132,684 78,171 56,195 22,654 760,770 1,044,588 1,300213 1,475,490 1,349,329 (329,669) (241,619) (238,956) (249,628) (130,381) 0.0% -26.7% 4.5% 0.0% -26.7% -27.5% -24.3% -47.8% -60.5% 2006 Projected YE 491,056 193,550 53,125 4,888 742,599 297 286 17,334 126,890 155,794 132,684 61 391 23,337 814,716 (72,117) -44.69% -78.12% 0.0% -10.0% -20.0% -30.0% -40.0% -50.0% -60.0% -70.0% -80.0% -90.0% Airport Operating Deficit Reduction 200 2002 2003 2004 2005 2006 % Deficit Reduction - Trend 2001-2006 % Deficit Reduction - Trend 2001-2006 ARKANSAS DEPARTMENT OF AERONAUTICS • APPLICATION FOR STATE AIRPORT AID The City/County of Fayetteville , herein called "Sponsor", hereby makes application to the. Arkansas Department of Aeronautics for State funds pursuant to Act 733 of 1977, for the purpose of aiding in financing a project for the development of a municipal airport located in the City of Fayetteville , Arkansas, Washington County. Date of Request: May 19, 2006 Name of Airport: Fayetteville Municipal Airport / Drake Field (FYV) Name and address of City/County Commission sponsoring request: City of Fayetteville Person to contact about project: 113 West Mountain St. Ray M. Boudreaux, Director Fayetteville, AR 72701 4500 S School Ave, Suite F Phone/Fax Number: 479-718-7642 Ph no/Fax Number: 479-718-7646 Name and address of Engineering Firm (If Applicable): McClelland Consulting Engineers Contact Person: Wayne Jones Phone/Fax Number. 479.443.2377 / 479.443.9241 Describe the work to be accomplished: Construct 80' X 120' corporate hangar. State and Local Project Costs: Please indicate: x 50-50% Match 75-25% Match 90-10% Match Federal AIP Projects: Total Cost of Project $ 652,725.00 Total Cost of Project $ Local Share/Funds 402,725.00 Federal Share (90%) $ Local Share/In-Kind Local Share (5%) $ State Share 250,000.00 State Share (5%) $ State Airport Aid Application Page Two Provide the information listed below as it applies to your project: FUNDS: Source of Funds: State Funding: Arkansas State Department of Aeronautics Local Funding: Fayetteville Municipal Funds, Airport Div, City of Fayetteville debt financing.. Source of In -Kind Services N/A Estimate starting date of project: July 2006 1 Estimate completion date of project: April 2007 Project will be for: New Airport Existing Airport XX Is land to be leased or purchased? NO Description of land and cost per acre: Provide the Federal AIP Grant Number (AIP Projects Only) State Representatives for your area: State Senator Sue Madison State Representative Bill Pritchard Dist 89 • State Airport Aid Application Page Three The Sponsor agrees to furnish the Arkansas Department of Aeronautics a copy of the legal instrument affecting use of the property for an airport. In application for a new landing site or expansion of existing facility, the. FAA Form 7480.1, Notice of Landing Area Proposal, must be approved by FAA before review for grant can be made by the state. No land purchased with State Grant Funds may be sold or disposed of without State Commission approval. All requests for sale or disposal of property will be considered on an individual case basis. No airport accepting State Grant funding may issue an Exclusive Rights Lease. 4 All applications for navigational aids (such as NDB or ILS) must have FAA site approval before a state grant can be approved. All Grant applications involving Federal Airport Improvement Program (AIP) funding must be accompanied by the approved FAA application. If this project is approved by the Arkansas Department of Aeronautics, and is accepted by the sponsor, it is agreed that all developments and construction shall meet standard FAA construction practices as outlined in the specifications of this agreement. Runways, Taxiways, Parking Ramps, etc., shall have a base and a thickness that will accommodate the weight of aircraft expected to operate at this airport. All grant applicants (City and/or County) are totally responsible for compliance with all Federal, State, County and City Laws, Statutes, Ordinances, Rules, Regulations, and Executive Orders concerning contracts and purchases for which this grant is approved and issued. All grant applicants must submit with their applications a completed Contract and Grant Disclosure and Certification Form. (Form F -1 -Pages 1&2). It is understood and agreed that should the sponsor fail to start this project within three (3) months of the Arkansas Department of Aeronautics' date of acceptance, that this grant is null and void. It is also agreed that this project, except FAA funded projects, shall be completed within one year from the date of acceptance of this grant by the Arkansas Department of Aeronautics. Applications for extension will be entertained if circumstances beyond the sponsor's control occur. Funds will be disbursed according to Department procedures and final inspection of completed project. (See Instruction Page). IN WITNESS WHEREOF, the sponsor has caused this Application for State Airport Aid to be duly executed in its name, this 19th day of May, 2006. etteville or Authori.-d Signature a M. Boudreau:, Director Tit ARKANSAS DEPARTMENT OF AERONAUTICS APPLICATION FOR STATE AIRPORT AID The City/County of Fayetteville , herein called "Sponsor", hereby makes application to the Arkansas Department of Aeronautics for ' State'funds pursuant to Act 733 of 1977, for the purpose of aiding in financing a project for the development of a municipal airport located in the City of Fayetteville , Arkansas, Washington County. Date of Request: May 19, 2006 Name of Airport: Fayetteville Municipal Airport / Drake Field (FYV) Name and address of City/County Commission sponsoring request: City of Fayetteville Person to contact about project: 113 West Mountain St. Ray M. Boudreaux, Director Fayetteville, AR 72701 4500 S School Ave, Suite F Phone/Fax Number: 479-718-7642 Ph no/Fax Number: 479-718-7646 Name and address of Engineering Firm (If Applicable): McClelland Consulting Engineers Contact Person: Wayne Jones Phone/Fax Number: 479.443.2377 / 479.443.9241 Describe the work to be accomplished: hangar. State and Local Project Costs: Please indicate: x 50-50% Match 75-25% Match 90-10% Match Total Local Local State Cost of Project Share/Funds Share/In-Kind Share $ 652,725.00 402,725.00 250,000.00 Construct 80' X 120' corporate Federal AIP Projects: Total Cost of Project Federal Share (90%) Local Share (5%) State Share (5%) State Airport Aid Application Page Two Provide the information listed below as it applies to your project: FUNDS: Source of Funds: State Funding: Arkansas State Department of Aeronautics Local Funding: Fayetteville Municipal Funds, Airport Div, City of Fayetteville debt financing. Source of In -Kind Services N/A Estimate starting date of project: July 2006 Estimate completion date of project: April 2007 Project will be for: New Airport Existing Airport XX Is land to be leased or purchased? NO Description of land and cost per acre: Provide the Federal AIP Grant Number (AIP Projects Only) State Representatives for your area: State Senator Sue Madison State Representative Sill Pritchard Dist 89 State Airport Aid Application Page Three The Sponsor agrees to furnish the Arkansas Department of Aeronautics a copy of the legal instrument affecting use of the property for an airport. In application for a new landing site or expansion of existing facility, the FAA Form 7480.1, Notice of Landing Area Proposal, must be approved by FAA before review for'grant can be made by the state. No land purchased with State Grant Funds may be sold or disposed of without State Commission approval. All requests for sale or disposal of property will be considered on an individual case basis. No airport accepting State Grant funding may issue an Exclusive Rights Lease. All applications for navigational aids (such as NDB or ILS) must have FAA site approval before a state grant can be approved. • All Grant applications involving Federal Airport Improvement Program (AIP) funding must be accompanied by the approved FAA application. If this project is approved by the Arkansas Department of Aeronautics, and is accepted by the sponsor, it is agreed that all developments and construction shall meet standard FAA construction practices as outlined in the specifications of this agreement. Runways, Taxiways, Parking Ramps, etc., shall have a base and a thickness that will accommodate the weight of aircraft expected to operate at this airport. All grant applicants (City and/or County) are totally responsible for compliance with all Federal, State, County and City Laws, Statutes, Ordinances, Rules, Regulations, and Executive Orders concerning contracts and purchases for which this grant is approved and issued. All grant applicants must submit with their applications a completed Contract and Grant Disclosure and Certification Form. (Form F -1 -Pages 1&2). It is understood and agreed that should the sponsor fail to start this project within three'(3) months of the Arkansas Department of Aeronautics' date of acceptance, that this grant is null and void. It is also agreed that this project, except FAA funded projects, shall be completed within one year from the date of acceptance of this grant by the Arkansas Department of Aeronautics. Applications for extension will be entertained if circumstances beyond the sponsor's control occur. Funds will be disbursed according to Department procedures and final inspection of completed project. (See Instruction Page). IN WITNESS WHEREOF, the sponsor has caused this Application for State Airport Aid to be duly executed in its name, this 19th day of May, 2006. ayetteville ame •f Spons Authoriz Signature Ray M. Boudreaux, Director Title pnAttici kiIQ(o(0I Al .e,J eeatiAtti,si RESOLUTION NO. A RESOLUTION AUTHORIZING AIRPORT STAFF TO APPLY FOR AND ACCEPT TWO (2) SAAG GRANTS IN THE AMOUNT OF $250,000.00 EACH FROM THE ARKANSAS DEPARTMENT OF AERONAUTICS TO FUND A PORTION OF THE COST TO CONSTRUCT TWO (2) CORPORATE HANGARS AT THE FAYETTEVILLE MUNICIPAL AIRPORT; APPROVING THE FINANCING PLAN TO COVER THE CITY'S MATCH OF $700,000.00; AND AUTHORIZING THE MAYOR TO IMPLEMENT THE NECESSARY BUDGET ADJUSTMENTS TO EFFECTUATE THIS RESOLUTION. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council of the City of Fayetteville, Arkansas hereby authorizes Airport staff to apply for and accept Two (2) SAAG grants in the amount of $250,000.00 each from the Arkansas Department of Aeronautics to fund a portion of the cost to construct two (2) corporate hangars at the Fayetteville Municipal Airport. Section 2. That the City Council of the City of Fayetteville, Arkansas hereby approves the Financing Plan to cover the City's match of $700,000.00, with repayment over 15 years at a 5% annual interest rate on the declining balance. Section 3. That the City Council of the City of Fayette�,M,ie, kansas hereby authorizes the Mayor to implement the necessssaryibudWadlustments to effectuate this Resolution. PASSED and APPROVED this 6th da'y of June, 2006: ATTEST: By ONDM SMITH, City Clerk AN COODY, Mayor rClarice Pearman - Res. 109-06 Page 1 • From: To: Date: Subject: Clarice Pearman Boudreaux, Ray 6.15.06 6:20PM Res. 109-06 1 Ray, Attached is a copy of the above resolution regarding the SAAG Grant. Have a good day. Thanks. Clarice CC: Audit • • • Ray M. Boudreaux Submitted By City of Fayetteville Staff Review Form City Council Agenda Items Contracts NA City Council Meeting Date Aviation & Economic Development Division Action Required: General Government Department Mayor's signature on two (2) leases for future hangars. Note: Revenue will riot be collected in 2006. Hangar construction will not be completed until 2007. Revenue Cost of this request 5550.0955.4450.00 Account Number Project Number Budgeted Item Category/Project Budget Funds Used to Date Remaining Balance Budget Adjustment Attached West GA Hangars Program Category / Project Name Chrgs-Sry Program / Project Category Name General / Airport Fund Name c L Department • i 4/ 'rector 7(20(00 City Attorney Mayor Comments: � ce and Interna Service o gad 6 r 72Q Date Date Previous Ordinance or Resolution # Original Contract Date: Original Contract Number 109-06 • • i City Council Meeting of: N/A Agenda Item Number: CITY COUNCIL AGENDA MEMO/STAFF CONTRACT REVIEW MEMO TO: Mayor THRU: Staff/Contract Review Committee FROM: Ray M. Boudreaux, Director, Aviation and E %mom Development DATE: July 18, 2006 SUBJECT: Signature of the Mayor on the two attache . leases at Fayetteville Municipal Airport, Drake Field. RECOMMENDATION: Signature of the Mayor on the two attached leases. BACKGROUND: The West Side General Aviation Apron Project is currently underway and scheduled for completion mid September 2006. The two leases attached are for hangars to be constructed on the new apron. In previous action, the City Council approved a financing package to construct the hangars. General Revenue Funds used for construction will be paid back through the revenue generated through the leases for the buildings. Airport Staff, presented Department of Aeronautics State Airport Aid Grant (SAAG) applications to the Arkansas Airport Commission for $600,000.00 total ($300,000.00 for each building). Criterion for award of the grants is that the buildings be used for aviation related business/industry. The Commission has requested that the leases be signed by both parties. The attached leases have been signed by aviation related businesses that qualify for the SAAG grant award, Million Air Fayetteville and SkyVenture Aviation. DISCUSSION: Airport Staff requests that the leases be signed by the Mayor. Staff is not aware of any conflict which would prevent the City from entering into a lease prior to the construction of the building. We will not be able to construct the buildings without State support. Signature of the Mayor is needed to demonstrate the City's resolve and commitment to gain support of the State Aeronautics Commission. )3UDGET IMPACT: The grant revenue represents a significant reduction to the cost of the building for the City of Fayetteville. The cost reduction allows for a marketable rental rate which will return General Fund monies used to construct the buildings and generate long term revenue to the airport. Attachments: Leases w/ SkyVenture Aviation and Million Air Fayetteville Staff Review Form Letter from State of Arkansas Department of Aeronautics Aviation and Economic Development Department Fayetteville Municipal Ahpott, Drake Field 4500 South School Avenue, Suitc F Fayetteville, Arkansas 72701 Ray M. Boudreaux, Director