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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 11/20/2012 - FIRST READING OF ORDINANCE NO. 137, 2012, AUTHORIZDATE: November 20, 2012 STAFF: Jason Licon Mike Beckstead AGENDA ITEM SUMMARY FORT COLLINS CITY COUNCIL 35 SUBJECT First Reading of Ordinance No. 137, 2012, Authorizing the Appropriation of 2013 Fiscal Year Operating and Capital Improvement Funds for the Fort Collins-Loveland Municipal Airport. EXECUTIVE SUMMARY The 2013 annual operating budget for the Airport totals $693,100, and will be funded from Airport operating revenues, contributions from the Cities of Fort Collins and Loveland ($177,500 from each City), and interest earnings. This amount for each city is $92,500 greater than the previous year contributions of $85,000. For the City of Fort Collins the original $85,000 is funded from General Fund ongoing revenue, while the one-time increase of $92,500 will be funded from General Fund reserves. This Ordinance authorizes the City of Loveland to appropriate the City of Fort Collins portion of the Airport’s annual operating budget in the amount of $346,550. This is 50% of the entire Airport annual operating budget of $693,100. This Ordinance also appropriates the City’s 50% share of capital funds, totaling $1,100,000 for the Airport from federal and state grants; contributions from Fort Collins and Loveland; and the Airport General Fund. Most of the 2013 Airport capital funds, totaling $2,200,000, will be used to complete major Airport improvements, such as taxiway and apron rehabilitation and some funds are slated for utility master planning and design engineering to accommodate Airport business development. BACKGROUND / DISCUSSION In 1963, the City of Fort Collins and the City of Loveland agreed to the establishment of a regional aviation facility and became owners and operators of the Fort Collins-Loveland Municipal Airport, located approximately 16 miles southeast of downtown Fort Collins, just west of Interstate 25 on Earhart Road. The Airport is operated as a joint venture between the City of Fort Collins and the City of Loveland, with each city retaining a 50% ownership interest, sharing equally in policy-making and management, and with each assuming responsibility for 50% of the capital and operating costs associated with the Airport. The Airport’s mission is to provide a safe and efficient air transportation airport facility to the general public and aviation community by providing airport facilities that meet Federal Aviation Administration (FAA) safety standards and to implement a plan that ensures the efficient development of the Airport to meet the needs of the Fort Collins and Loveland communities. Airport revenues cover operating costs and capital projects. Each city contributes equal funding for Airport operating and capital costs. Airport development and improvement funds are also received, for eligible projects, from the FAA and the Colorado Department of Transportation, Division of Aeronautics. The annual operating costs for 2013 for the Airport are $693,100, and the City of Fort Collins contribution is $346,550. In addition, the Airport Manager is recommending additional capital expenditures and has identified the following funding sources: FAA Entitlement Grant $1,000,000 State Grant 1,000,000 Airport Revenues 200,000 Total $2,200,000 The additional capital expenditures will be to continue aircraft parking apron phase two improvements and for utility master planning and design engineering to accommodate Airport business development, $2,200,000. Thus, the City of Fort Collins appropriation for the capital expenditures identified above is $1,100,000 (50% of the total). November 20, 2012 -2- ITEM 35 FINANCIAL / ECONOMIC IMPACTS This Ordinance appropriates the City’s 50% share ($1,446,558) of the annual appropriation for fiscal year 2013 for Fort Collins-Loveland Municipal Airport budget. The City of Loveland manages the Airport’s budget and finances; however, since the City of Fort Collins owns 50% of the Airport, it is necessary for the City to appropriate its 50% portion of the Airport budget. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. ATTACHMENTS 1. Powerpoint presentation 1 Fort Collins City Council Meeting November 20, 2012 Historical Funding Breakdown • Since the Airport began offering commercial services in 2003 the Airport has: – Acquired $24 million in funding • $18 million in direct capital investment • $6 million in Airport operations and equipment costs – The breakdown of investment sources are: • Federal: $15,472,199 or 65.2% • State: $1,251,335 or 5.3% • Self generated: $5,842,862 or 24.6% • Contributions from Cities: $1,160,000 or 4.9% ATTACHMENT 1 2 Projected Budgetary Shortfall ‐ 2013 • The Airport no longer has scheduled air carrier services • Commercial air service revenues account for $295,000 of Airport operational revenues • In addition $185,000 in passenger facilities charges (PFC) will be lost – PFC funding helps pay for local matches on Federal and State grants as well as local projects – PFC funds are use restricted similar to Federal and State grants, therefore are classified as capital expenditures – $340,000 will be necessary for planned FAA & State grant matches for 2013 & 2014 Airport projects • A total of $480,000 annually will be lost in operational and capital revenue Airport Operational Expenses • Expenses have increased over time due to Airport growth and regulatory requirements • Allegiant’s decision will have little effect on required regulatory compliance for the FAA, TSA, DOT, and CDOT • Airport operations & maintenance will continue to keep the Airport maintained and operational for all Airport users 3 Airport Operational Budget • The proposed 2013 budget was $803,100 – $435,890 is total for personnel cost for 5 FTE & 1 Intern – $36,750 for supplies • Office, computer, fuel, paint, electrical, landscaping, safety, building, etc. – $330,460 for purchased services • Utilities, support services, training, meetings, insurance, vehicle maintenance, assessments, postage, etc. Revised Budget Proposal • The revised proposed 2013 budget is $693,100 – $360,100 total personnel cost for 4 FTE & 1 intern – $30,350 for supplies – $302,650 for purchased services • This is a total proposed reduction of $110,000 • Will require an additional $92,500 from each City until commercial air service is reestablished or other revenues are increased • Total $177,500 annually from each City 4 Planned 2013 Capital Projects • $2.5 million aircraft parking apron rehabilitation – Last paved in 1977 – Is the parking area for transient aircraft and for the Airport’s corporate and business users • Funding source breakdown: – $1.4 million derived from Federal Grants – $900,000 from a State of Colorado Grant – $200,000 local share match Planned Actions Moving Forward • The Airport over the next year will be focused on ways to increase revenues • Air service development has taken a top priority, and total cost is yet to be determined – Is key to financial sustainability as outlined in the adopted Airport business plan – The Airport will utilize the Small Community Air Service Development Grant to fund a significant portion of air service development costs – Without commercial service, total Airport revenues will fall to 46% or $1.15 million by 2015 from a projected $2.5 million ORDINANCE NO. 137, 2012 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE APPROPRIATION OF 2013 FISCAL YEAR OPERATING AND CAPITAL IMPROVEMENT FUNDS FOR THE FORT COLLINS-LOVELAND MUNICIPAL AIRPORT WHEREAS, in 1963, the City of Fort Collins and the City of Loveland (the “Cities”) agreed to establish a regional general aviation facility and became owners and operators of the Fort Collins- Loveland Municipal Airport (the “Airport”); and WHEREAS, the Airport is operated as a joint venture between the Cities, with each city retaining a 50% ownership interest, sharing equally in policy-making and management, and assuming responsibility for 50% of the capital and operating costs associated with the Airport; and WHEREAS, in accordance with the Intergovernmental Agreement, dated May 16, 2000, between the Cities for the joint operation of the Airport (the “IGA”), the Airport Manager is responsible for preparing the Airport’s annual operating budget and submitting it to the Cities for their approval; and WHEREAS, the Airport Manager has submitted for City Council consideration a 2013 Airport operating budget totaling $693,100 and the City’s share is $346,550; and WHEREAS, it is the desire of the City Council to authorize the City of Loveland to appropriate the City’s share of the necessary funds for operating costs of the Airport, totaling $346,550, for the fiscal year beginning January 1, 2013, and ending December 31, 2013; and WHEREAS, the Airport Manager recommends the following capital improvements for 2013, totaling $2,200,000, that are not included in the 2012 Airport operating budget: Taxiway Improvements and Utility Master Planning and Design Engineering $2,200,000 WHEREAS, funding for the 2013 capital improvements has been identified as follows: FAA Entitlement Grants $ 1,000,000 State Grant 1,000,000 Airport Revenues 200,000 Total $ 2,200,000 WHEREAS, the City’s 50% share of the 2013 capital improvement costs is $1,100,000; and WHEREAS, under the IGA, the City’s share of existing and unanticipated Airport revenue will be held and disbursed by the City of Loveland as an agent on behalf of the Cities since the City of Loveland provides finance and accounting services for the Airport; and WHEREAS, in accordance with Article V, Section 8(b), of the City Charter, any expense or liability entered into by an agent of the City, on behalf of the City, shall not be made unless an appropriation therefor shall have been made by the City Council. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the City Council hereby adopts the 2013 Airport operating budget. Section 2. That the City Council hereby authorizes the appropriation of THREE HUNDRED FORTY-SIX THOUSAND FIVE HUNDRED FIFTY DOLLARS ($346,550) to be expended to defray the operating costs of the Fort Collins-Loveland Municipal Airport. Section 3. That the City Council hereby authorizes the appropriation of ONE MILLION ONE HUNDRED THOUSAND DOLLARS ($1,100,000) to be used for 2013 capital improvements at the Fort Collins-Loveland Municipal Airport. Introduced, considered favorably on first reading, and ordered published this 20th day of November, A.D. 2012, and to be presented for final passage on the 4th day of December, A.D. 2012. _________________________________ Mayor Pro Tem ATTEST: _____________________________ City Clerk Passed and adopted on final reading on the 4th day of December, A.D. 2012. _________________________________ Mayor ATTEST: _____________________________ City Clerk