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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 07/05/2016 - FIRST READING OF ORDINANCE NO. 083, 2016, APPROVINAgenda Item 4 Item # 4 Page 1 AGENDA ITEM SUMMARY July 5, 2016 City Council STAFF Jason Licon, Airport Director Mike Beckstead, Chief Financial Officer SUBJECT First Reading of Ordinance No. 083, 2016, Approving a Revision to the Airport Operating Budget and Appropriating Reserves in the Airport Fund for the Northern Colorado Regional Airport to Complete the Strategic Plan Goals. EXECUTIVE SUMMARY The purpose of this item is to approve an amendment to the 2016 Airport operating budget and appropriate funds from the Airport Fund to initiate work associated with the City Council approved Airport Strategic Plan. The Northern Colorado Regional Airport Commission has reviewed and approved this request; additionally the City of Fort Collins Council Finance Committee has also been presented with this information. The 2016 Airport operating budget will be amended to authorize expenditure of the total amount of $165,000 from the Airport Fund. The City of Fort Collins will appropriate 50% ($82,500) of the total $165,000 request, and the City of Loveland will be providing the other half of the appropriation. This appropriation is needed as the funding resources were not included in the adopted 2016 Airport Budget approved by Council and expenditure of additional funds not included in the Budget requires City Council appropriation as outlined in the current Intergovernmental agreement between the Cities. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. BACKGROUND / DISCUSSION The Northern Colorado Regional Airport Commission is working to achieve Strategic Planning goals listed below: • Creation of a financially sustainable business model • Encourage investment from the private sector • Rebrand the Airport and more productively engage the public The three goals focus on strengthening the financial sustainability of the Airport. The Airport’s current approved budget is used to maintain FAA regulatory standards which include general operations and maintenance. The funding request will be used to add an Airport staff member tasked with development and promotion and creation of a communications and marketing plan with focus on rebranding of the Airport. The total cost to achieve said goals for 2016 is $165,000 and will be taken from unappropriated reserves in the Airport Fund. Reserves in the Airport Fund are used for capital projects that require Federal and State grant matches and general maintenance and repair of infrastructure ineligible for grant funding. The unassigned balance of the Airport Fund is currently $1.7 million, and use of the fund is restricted for Airport needs. Since 2011 the Airport Fund has been used to leverage $13 million in Federal and State grants. These grants are used to maintain Airport infrastructure such as runways and taxiways and for equipment necessary for regulatory requirements Agenda Item 4 Item # 4 Page 2 and operational safety. The forecasted expenditures from reserves in the Airport Fund are $1.1 million through 2021. This includes grant match forecasts and planned projects that are ineligible for Federal or State grant funding. The Northern Colorado Regional Airport Commission desires to move forward with this request to enable continued progress on achievement of Strategic Plan goals. The achievement of these goals will create additional funding streams for the Airport including an increase in FAA funding resources and positive regional economic impact. CITY FINANCIAL IMPACTS This initiative has a bottom line impact of $165,000 to reserves held in the Airport Fund, and ongoing impacts will be included in the 2017 and 2018 Airport budget. The Airport Fund unencumbered balance is approximately $1.7 million and has been used historically to provide matching funds that leverage Federal and State grants. The Loveland City Council is also being asked to appropriate the 50% match of $82,500. BOARD / COMMISSION RECOMMENDATION At its June 20, 2016, meeting, the Council Finance Committee recommended this move forward on consent provided the AIS addresses the questions raised during the Finance Committee meeting. ATTACHMENTS 1. Council Finance Committee presentation, June 20, 2016 (PDF) Airport Supplementary Funding Appropriation Request ATTACHMENT 1 Airport Strategic Plan • The Strategic Plan was approved and adopted by both City Councils in 2015. • The plan has five primary components, two that have been accomplished: 1. Protect against encroachment from non-compatible land uses 2. Create a sustainable business model with potential revenue streams and financing 3. Encourage immediate private investment 4. Revise the Airport governance structure and authority for the governing board 5. Rebrand the Airport and more productively engage the public Request & Desired Outcome • A work plan was created and approved by the Airport Commission to accomplish the remaining strategic plan goals • Request is to appropriate $165,000 from the Airport reserve fund • Existing budget will not include resources to achieve goals and in order to do so requires additional funding support • Additional cost will require additional funding requests of the Cities to cover estimated expenses • 2017 - $82,500 from each • 2018 - $65,000 from each • Supplemental funding will be reduced over time as a result of goal accomplishment according to financial forecasting Estimated Cost Detail 2016 2017 2018 Business development and marketing FTE $ 40,000 $ 100,000 $ 100,000 Clarify market & potential $ 20,000 Triad TTF agreement resolution $ 20,000 Business plan update $ 15,000 Create communications & PR plan $ 35,000 Create marketing displays $ 10,000 Rebranding including airport signage $ 40,000 Advertising & event marketing $ 20,000 $ 30,000 $ 30,000 Total Ongoing Costs $ 60,000 $ 130,000 $ 130,000 Total One-Time Costs $ 105,000 $ 35,000 $ - Total $ 165,000 $ 165,000 $ 130,000 Goals to be Accomplished • Add an additional staff member that will be tasked specifically on Airport development and marketing • Clarify the Airport’s market potential for aviation and non-aviation use • Rebrand the Airport and create a communications and public relations plan to be used for marketing & public engagement • Create resolution to the existing through the fence agreement • Update the 2009 Airport business plan -1- ORDINANCE NO. 083, 2016 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROVING A REVISION TO THE AIRPORT OPERATING BUDGET AND APPROPRIATING RESERVES IN THE AIRPORT FUND FOR THE NORTHERN COLORADO REGIONAL AIRPORT TO COMPLETE THE STRATEGIC PLAN GOALS 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, now known as the Northern Colorado Regional 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 each assuming responsibility for 50% of the Airport’s capital and operating costs; and WHEREAS, pursuant to the Amended and Restated Intergovernmental Agreement for the Joint Operation of the Fort Collins-Loveland Municipal Airport dated January 22, 2015, and the First Amendment to the Amended and Restated Intergovernmental Agreement for the Joint Operation of the Fort Collins-Loveland Municipal Airport, now known as the Northern Colorado Regional 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, under the IGA, the City’s share of existing and unanticipated Airport revenue is to 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, under the IGA, each City’s share of the Airport‘s annual operating budget and the Airport capital improvement plan shall be appropriated by each City and transferred or otherwise paid into the designated account to be used for Airport funding on an annual basis; and WHEREAS, on November 17, 2015, City Council adopted Ordinance No. 135, 2015, adopting the 2016 Airport Budget and appropriating the City’s share of that Budget; 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 for the same has been made by the City Council; and WHEREAS, the Airport Manager has submitted for City Council consideration a request to increase the 2016 Airport Budget by a total of $165,000 to fund work associated with the City Council approved Airport Strategic Plan to add a staff person tasked with development and promotion and creation of a communications and marketing plan with a focus on rebranding of the Airport (the Project); and WHEREAS, pursuant to the IGA, the City of Loveland holds on behalf of both Cities the revenues of, and other financial contributions to, the Airport in a fund, which includes unappropriated and unencumbered, reserves (the “Airport Fund”); and -2- WHEREAS, in order to fund the increase to the approved 2016 Airport operating budget, the Cities must each appropriate one half of the total increase, or $82,500 each from jointly owned reserves held in the Airport Fund, and Council desires to appropriate that additional amount for the Project. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the City Council hereby makes and adopts the determinations and findings contained in the recitals set forth above. Section 2. That the City Council hereby approves an amendment to the 2016 Airport Budget to increase authorized 2016 expenditures by the total amount ONE HUNDRED SIXTY FIVE THOUSAND DOLLARS ($165,000) to fund the Project. Section 3. That the City Council hereby appropriates reserves in the Airport Fund in the amount of EIGHTY TWO THOUSAND FIVE HUNDRED DOLLARS ($82,500) to be expended on the City’s share of Project. Introduced, considered favorably on first reading, and ordered published this 5th day of July, A.D. 2016, and to be presented for final passage on the 19th day of July, A.D. 2016. __________________________________ Mayor ATTEST: _______________________________ City Clerk Passed and adopted on final reading on the 19th day of July, A.D. 2016. __________________________________ Mayor ATTEST: _______________________________ City Clerk