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07-10-1997 QMT QA 1Q8 ( QUoo o AIRPORT ADVISORY BOARD MEETING City of Las Cruces,New Mexico July 10, 1997 Members Present: Stephanie Medoff, Gene Kennon, Jim Boykin, Chuck McLean, Frank Dailey, Bill Madden Members Absent: Charles Trego Others Present: Ted A. Morris Jr., Airport/Industrial Park Manager; Susan Pfeiffer, Recording Secretary; Hal Kading, Southwest Aviation, Inc.; Vernon Wilson, Crosswinds Grill; Martin Ditmore,hangar owner. The meeting was called to order at 12:00 noon in the Airport Conference Room by Vice Chairman, Mr. Jim Boykin, and a quorum was noted. MINUTES: A motion was made by Mr. Kennon, seconded by Mr. Dailey to accept the minutes of the June 5, 1997 Board meeting as submitted. All were in favor, motion carried. UNFINISHED BUSINESS: Proposed Airport Policies: Mr. Morris said that Pete Connelly, Acting City Attorney, and Shirley Clark, City Clerk, have reviewed the proposed Airport Policies, and recommend they be made into an Ordinance instead of a Resolution. Mr. Morris stated that he is in the process of rewriting them, and removing the parts unnecessary in an ordinance. He reviewed Exhibit "H", which is an analysis of Airport Revenues, and explained his reasons for recommending 1/2 of 1% of Gross Receipts as a Commercial Use Fee for resident businesses at the Airport. Following a discussion, the Board told Mr. Morns that they favored the 1/2 of 1% Option, and would recommend it to the City Council. Mr. Boykin asked what would happen to the 8 different leases currently in effect at the Airport when and if the Ordinance was adopted. Mr. Morris said the leaseholders would have the option of renegotiating their leases, or could choose to remain under the conditions of their present lease. AN EQUAL OPPORTUNITY EMPLOYEER P.O.Box 20000 LAS CRUCES,NEW MEXICO 80004 Phone 505/526-0000 -2- MINUTES -AIRPORT ADVISORY BOARD MEETING July 10, 1997 Mr. Dailey suggested that due to the importance of this and other issues considered by the Board, the Board contact their City Council Liaison, Councillor Gustafson, and invite him to attend their next meeting. Mrs. Medoff said that she would call and invite him. Proposed Land Development Adjacent to Airport: Mr. McLean stated he had spoken with Councillor Tomlin who told him the Special Meeting to discuss Bright View Land Company's proposed development would definitely be rescheduled. It was mentioned that there was some confusion as to who owned the water rights to the property, and that it would probably go to litigation to decide. Airport Manager's Report: Mr. Morris reviewed his report on current projects, and airport issues (see attachment). Pavement Maintenance: Mr. Morris said that he has asked the State for $63,000 in matching funds for pavement maintenance this year, and we should know within a couple of weeks whether the request has been approved. Mr. Morris reported there would be a massive acrylic surface sealing project in August that would cover most of the Airport. NEW BUSINESS: Rio Grande Rotary Club Meeting: Mr. Morris stated that he has been asked to speak at the July 15 meeting of the Rotary Club, and that he would present a positive view of the Airport and the issues facing it. He said that the request for him to speak came following the July 8 meeting in which Mr. Rosenow, representing "Fly Las Cruces" which is a Sub- Committee of the Chamber of Commerce, spoke giving his views of the Airport, City Staff, and Airport Advisory Board. Regional Jet Service: There was a discussion on regional jet service, and what it would take to attract that service to our Airport. With no further business to conduct, a motion was made by Mr. Boykin, seconded by Mr. Madden to adjourn the meeting at 1:30 PM. All were in favor,motion carried. AIRPORT MANAGER'S REPORT FOR AIRPORT ADVISORY BOARD -July 10, 1997 TEXT: YOUR NOTES: AIP Project#12: "Taxiway C"Project. - FAA will fund Taxiway, Fencing and AWOS as 1 project. - State funding should be approved in about "2 weeks." Will consist of 4 grants - 2 for the pavements, 1 for fencing & 1 for AWOS. - Molzen Corbin (planners) still planning AWOS/NEXWOS. Also, still must complete a re-write of the bid documents for final review by City Engineer. - This means that, in the opinion of the City Engineer & Director of DSD, it is too late in the year to begin construction - we'll be laying asphalt in Dec/Jan when its too cold. - So, we will probably tell Molzen-Corbin to plan a bid opening of Feb. 1, 1998, with the construction to begin in the spring and be completed next summer. AIP Projections: Nothing to Report. Airport Policy progress &time/phase: Verbal Update,but otherwise we're still working on this. - Please see attached economic evaluation for revenue generation, which proposes that the 2% for resident commercial be changed to 1/2%. - City Clerk and City Attorney (acting) believe we may be unable to collect the"2%"or Through-the-fence fees unless tied directly to a land or facility lease. Still researching, but if this is the case,the solution may be: -- Prohibit all through the fence operations. -- Issue Airport Commercial Lease Agreements for a non-exclusive right to use the City's property (the Airport) for business purposes. - Also, City Clerk believes that policies are probably insufficient for enforcement of the "new law" provisions therein, and an ordinance needs to be adopted. - So, I'm drafting an ordinance with any "new law" included as a "cover sheet"for the policy boiler plate leases, etc. - Hope to have more definitive answers next month. Auto Sunshades: Winning bid came in at about $1,000 per parking space, installed. We should be able to do 60 or so. Aviation Day: Mr. Rosenow requested City review of ops plan and waiver request last week. City Attorney, Safety Officer, Risk Manager, and I reviewed it for the City, Chuck McLean reviewed it for the AAB. Review completed yesterday; Mr. Rosenow picked up the letter this morning. There were a number of omissions and discrepancies in the ops plan when compared to the MOA. Bright View Land Company development: City Council Work Session held 5:00 p.m. June 9, 1997. Cut short and rescheduled as Special Meeting for June 30, which was postponed due to a death in Mr. Moscato's family. We'll let you know when its rescheduled. Crop Dusters: All crop dusters operating this summer have been noted to be in violation of FAR Part 137.45(a) and are deviating from the traffic pattern without prior coordination with airport management. I do not intend to grant any request for traffic pattern deviations, especially from those dusters that operate without using radios. If you know any of the dusters, you might inform them that if the FSDO gets a complaint that they cut off an aircraft in the pattern here,they're on their own. Electricity: Nothing new. Hangar Parcel Lease requests: - Ed Mimoso states he will send a letter this week proposing lease of Parcel 21, north of Wayne Wallace's big hangar. - Sid Brannen also called expressing an interested in a parcel for a hangar. - Mr. Wallace did not submit building plans by correction date of Jul. 4. He did call, and is still evaluating his options. I told him he could delay paying his rent for a couple weeks while he takes a last look at the situation. Bottom line: Unless he proposes to build the hangar as described in his lease, or an alternative full commercial development of the property, I will propose the City Council terminate the lease. Master Plan. FAA has sent out a letter requesting public comment on the change to the Airport Layout Plan which includes elimination of the 1985 plan for the parallel 8L/26R. Pavement Maintenance. Last month, Mr. Moody attended this meeting and complained about the crack sealing. Maintenance could not duplicate the problem. Personnel. - Erick Dahlin, the part time maintenance worker, quit to return to California at the end of last month. We'll re-advertise the job shortly. UNICOM Situation: Radios linked up, continuing field testing. Only problem noted so far is that the radio keys briefly whenever there is a lightning bolt anywhere in the vicinity of Southern New Mexico! DRAFT DRAFT DRAFT Resolution ,Exhibit"H" Analysis of Airport Revenues 1. This Exhibit summarizes the reasoning in recommending the current City precedent of 2% of Gross Receipts as a Commercial Use Fee for resident businesses at the Airport be changed to the previous(pre-1989)standard of 1/2 of 1%. 2. The primary assumptions of the Airport Advisory Board and Airport Manager regarding fees and charges are: a.Those listed in Chapter 8 of the proposed policies are reasonable at the Airport's current state of development. b. Imposition of direct fees on the general public (registration fees and the like) would prove inefficient to collect, and inconsequential when compared to total Airport revenues, and extremely unpopular, resulting in departure of Airport residents to other area Airports. c.That although there are many ways to extract revenue from an Airport,the proposed breakout of functional areas is best suited to our Airport population at this stage of Airport development. These functional areas are: (1) Land rents, which are intentionally low (30% of the state average) to encourage private, commercial development. (2) Facility rents at or near the Industry Average(office,fuel farm,hangar space,tie-downs,etc.) (3) Transient commercial aircraft use fees at or near the Industry Average. (4) Airport Commercial License Fees for resident businesses on the Airport at those rates established by the City Council prior to 1989. (5) Punitive fees for itinerant,through-the-fence operators to protect established businesses. d. That the policies are flexible and permit the City Council to quickly and reasonably change the fee structure to suit developing conditions and new business opportunities. 3. The only public comments received on the policies were from commercial operators currently using the Airport. Most of the businesses operating are doing so without a current City business registration or state tax number. The comments those representatives have made include wanting the City to continue to permit such unlawful operations, eliminate the requirement to obtain liability insurance naming the City as an additional insured, and other comments considered not germane to the current discussion. 4. After evaluating the various comments,the City staff and Airport Advisory Board concluded that: a. The transient fees and various rents should remain as written in the proposed policies. The revenues generated would be as shown in the following table: b. The City Council should be presented with alternative fee structures for resident commercial operators. Therefore, the following analysis of potential revenue streams is provided to permit the Council to evaluate alternatives. Three options are examined: The 2%option,the 1/2%option,and the"Zero"percent option. The following tables do not include federal or state grant subsidies,projected to be$1,835,312 in FY 97/98,and assume that all businesses locate on the Airport as residents, at those levels described in the "Economic Impact Study" of the Airport Master Plan (generating $1,324,595 in Gross Revenues). IL� J (1) POLICIES AS WRITTEN (IN ACCORDANCE WITH CURRENT CITY COUNCIL PRECEDENTS): THE 2% SOLUTION. The following table shows the effect of the fees and charges included in Chapter 8 of the proposed policies on the percentage of General Fund subsidy to the Airport,using FY 97/98 budget projections. BOTTOM LINE: The proposed policies would produce an estimated additional$18,025 in revenues, reducing the City's General Fund subsidy by the same amount. (2) POLICIES MODIFIED TO 1/2 OF 1%, THE RATE APPLICABLE PRIOR TO JAN. 1, 1989: The following table shows the effect on revenues if this rate were charged. BOTTOM LINE: The 1/2%proposal would result in a very, very slight decrease in the City's General Fund subsidy to the Airport. (3) POLICIES MODIFIED TO ELIMINATE COMMERCIAL FEES FOR RESIDENT OPERATORS: The following table shows the effect to revenues if no fees were charged to resident commercial operators. Bottom Line: The General Fund Subsidy to the Airport would increase by approximately 1%($6,785). 5. That the recommendation of the Advisory Board and Airport Management is to return to the 1988 standard of 1/2% because: - 1/2%is reasonable for an Airport at our level of development. - 1/2%is sufficient to maintain the precedent of Commercial Use Fees tied to Gross Receipts. - The revenues generated will be approximately the same as currently received. - The threat that businesses would leave the Airport and community if the 2%fee were adopted are credible. - The combination of high through-the-fence fees and reasonable resident fees would encourage the "fly-by-night" operators to establish stable,resident businesses,enhancing the orderly commercial development of the Airport. - The 1/2% fee might be enough of an inducement to Southwest Aviation for that company to enter into a new lease resulting in more favorable land access and operational terms and conditions for the City. AIBPQBT MANAGER'S SUBJECTIVE SUMMARY QP PUBLIC COMMENT QN M PROPOSALS REVENUE SOURCE COMMENT SUMMARY Transient Aircraft Fees: Should be eliminated to facilitate increased commercial flights and attract additional airlines,etc.* Rents: Generally,O.K.as written.** Depreciation: No Comments Received. Commercial Fees: 1. Eliminate fees for resident commercial operators(every commenter stated this sentiment). 2. Prohibit through-the-fence operators who compete with resident businesses, although some businesses desired exemptions for pilots-for-hire (though other businesses did not want this exemption). General Fund Subsidy: Should be 100% of Airport local revenue. This appears to be a universal view of Airport users, based on the concept that the Airport is important to the City primarily as an aerial gateway for business conducted off the Airport, and therefore businesses on the Airport should be exempted since they facilitate this economy. * Please note that New Mexico State Law prohibits collecting landing fees from non-commercial aircraft. The Airport Manager does not believe this sentiment has any basis in experience. Commercial Aircraft come to a location for specific business purposes,and reasonable landing fees are part of the cost of doing business. ** Some comments included proposals to eliminate land-lease charges (the City would "assign" parcels at no charge to persons wishing to build hangars, start businesses,etc.),and for free use of City-owned facilities, specifically the fuel farm, large hangar, terminal counters, etc. The rationale of these proposals was that such subsidized use would encourage Airport use and commerce,thereby improving the overall business environment of the City. FUND& SOURCE 1997/98 % OF 97/98 POLICY % OF OF REVENUE BUDGET REVENUES POTENTIAL REVENUES 020 Transient Aircraft Fees: $ 4,000 0.5% $ 4,000 0.5% 020 Rents of all kinds: $ 107,310 14.5% $ 109,000 14.7% 020 Depreciation: $ 501000 6.7% $ 50,000 6.7% 020 SUB-TOTAL: $ 161,310 21.8% $ 163,000 22.1% LOCALLY GENERATED AIRPORT REVENUES* (2% OPTION) FUND& SOURCE 1997/98 % OF 97/98 POLICY % OF OF REVENUE BUDGET REVENUES POTENTIAL REVENUES 020 SUB-TOTAL: $ 161,310 21.8% $ 163,000 22.1% 020 Commercial Fees:** $ 8,475 1.1% $ 26,500 3.6% 020 & 106 General Fund: $ 569,226 77.0% $ 549,511 74.4% TOTAL REVENUES: $ 739,011 99.9% $ 739,011 100.1% LOCALLY GENERATED AIRPORT REVENUES* (1/2% OPTION FUND& SOURCE 1997/98 % OF 97/98 POLICY % OF OF REVENUE BUDGET REVENUES POTENTIAL REVENUES 020 SUB-TOTAL: $ 161,310 21.8% $ 163,000 22.1% 020 Commercial Fees:** $ 8,475 1.1% $ 6,625 0.9% 020 & 106 General Fund: $ 569,226 77.0% $ 563,386 77.0% TOTAL REVENUES: $ 739,011 99.9% $ 739,011 100.0% LOCALLY GENERATED AIRPORT REVENUES* FUND& SOURCE 1997/98 % OF 97/98 POLICY % OF OF REVENUE BUDGET REVENUES POTENTIAL REVENUES 020 SUB-TOTAL: $ 161,310 21.8% $ 163,000 22.1% 020 Commercial Fees:** $ 8,475 1.1% $ 0 0.0% 020 & 106 General Fund: $ 569,226 77.0% $ 576,011 77.9% TOTAL REVENUES: $ 739,011 99.9% $ 739,011 100.0%