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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 11/05/2019 - SECOND READING OF ORDINANCE NO. 121, 2019, ADOPTINAgenda Item 2 Item # 2 Page 1 AGENDA ITEM SUMMARY November 5, 2019 City Council STAFF Jason Licon, Airport Director Judy Schmidt, Legal SUBJECT Second Reading of Ordinance No. 121, 2019, Adopting the 2020 Budget and Appropriating the Fort Collins Share of the 2020 Fiscal Year Operating and Capital Improvements Funds for the Northern Colorado Regional Airport. EXECUTIVE SUMMARY This Ordinance, unanimously adopted on First Reading on October 15, 2019, adopts the 2020 budget for the Northern Colorado Regional Airport and appropriate Fort Collins’ share of the 2020 fiscal year operating and capital funds for the Airport. The City’s 50% share of the 2020 Airport operating budget is $646,445 and 50% share of the 2020 capital budget is $740,500, for a total City appropriation of $1,386,945. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. ATTACHMENTS 1. First Reading Agenda Item Summary, October 15, 2019 (PDF) 2. Ordinance No. 121, 2019 (PDF) Agenda Item 5 Item # 5 Page 1 AGENDA ITEM SUMMARY October 15, 2019 City Council STAFF Jason Licon, Airport Director Judy Schmidt, Legal SUBJECT First Reading of Ordinance No. 121, 2019, Adopting the 2020 Budget and Appropriating the Fort Collins Share of the 2020 Fiscal Year Operating and Capital Improvements Funds for the Northern Colorado Regional Airport. EXECUTIVE SUMMARY The purpose of this item is to adopt the 2020 budget for the Northern Colorado Regional Airport and appropriate Fort Collins’ share of the 2020 fiscal year operating and capital funds for the Airport. The City’s 50% share of the 2020 Airport operating budget is $646,445 and 50% share of the 2020 capital budget is $740,500, for a total City appropriation of $1,386,945. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. 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 Northern Colorado Regional Airport, located ten miles southeast of downtown Fort Collins, just west of Interstate 25. 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 policymaking and management, and with each assuming responsibility for 50% of the capital and operating costs associated with the Airport. Airport governance and management is set forth in the Amended and Restated Intergovernmental Agreement for the Joint Operation of the Airport dated January 22, 2015, as amended June 7, 2016 between the Cities (IGA). The Airport’s mission is to provide a fiscally sustainable airport to the region with facilities that meet the highest FAA standards for safety and efficiency while ensuring the long-term ability of the Airport to serve Northern Colorado as a transportation hub and a global gateway for commerce. According to a 2013 State of Colorado study, the Northern Colorado Airport provides a regional economic impact of approximately $129.4 million annually. All revenues derived from the Airport are applied to both operating and capital expenditures. Each City contributes equal funding, when necessary, for Airport operating and capital needs as defined in the IGA. External funding is also received through grants that are applied for and received by the Airport for eligible projects from the Federal Aviation Administration and the Colorado Department of Transportation Division of Aeronautics. The 2020 Airport budget reflects a change in the way the City of Fort Collins provides funding to cover operational costs of the Airport. In 2019 direct contributions by the City were discontinued and revenues are now being ATTACHMENT 1 Agenda Item 5 Item # 5 Page 2 received by the Airport in the form of rent paid by the City under a land lease for a portion of jointly-owned Airport property now being used for the Northern Colorado Regional Law Enforcement Training Center (Training Center Lease). This Ordinance appropriates the City of Fort Collins 50% share ($646,445) of the 2020 Airport operating budget ($1,292,890) and 50% share ($740,500) of the 2020 capital budget ($1,481,000), for a total appropriation of $1,386,945 by the City. The City of Loveland will be appropriating the other 50% of the total 2020 Airport budget ($2,773,890). The Airport’s operating budget is used to maintain and operate the facility in compliance with all regulatory standards for safety and security and to achieve goals set by the Northern Colorado Regional Airport Commission. The Airport’s capital budget will be used to complete improvement projects, including the design for a new commercial terminal building and associated support infrastructure, and the repaving of an existing aircraft taxiway. Below are the external financial resources and required grant matches that are expected through federal and state grants, and from airport revenues to fund the 2020 capital budget: FAA Grants $835,000 State Grants $87,000 Airport Revenues $59,000 Airport Reserves $500,000 Total $1,481,000 The $500,000 item is an appropriation for use by the Northern Colorado Regional Airport Commission consistent with the approved 2020 Budget for high priority projects. This Airport Reserve appropriation does not require any additional funding from the Cities. The Northern Colorado Regional Airport Commission approved the proposed 2020 Airport Budget and recommended it for approval by the Fort Collins and Loveland City Councils on August 15, 2019. The City of Loveland’s City Council will consider the 2020 Airport budget concurrently, with First Reading scheduled for October 15, 2019 and Second Reading scheduled for November 5, 2019. CITY FINANCIAL IMPACTS This Ordinance appropriates the City’s 50% share of the annual budget for fiscal year 2020 for the Northern Colorado Regional Airport, which totals $1,386,945 and is 50% of the $2,773,890 total combined 2020 Airport operating and capital budget. The proposed budget does not include financial contributions from the City’s General Fund as it has in previous years, as the anticipated Airport revenues will increase in 2020, primarily as a result of the Training Center Lease payments by both Cities. The City of Loveland manages the Airport’s budget and finances under the IGA; however, each City Council must approve the annual budget under the IGA and, since the City of Fort Collins owns 50% of the Airport, it is necessary for the City to appropriate its 50% portion of the total Airport budget. 25',1$1&(12 2)7+(&281&,/2)7+(&,7<2))257&2//,16 $'237,1*7+(%8'*(7$1'$335235,$7,1*7+()257&2//,16 6+$5(2)7+(),6&$/<($523(5$7,1*$1'&$3,7$/,03529(0(17 )81'6)257+(1257+(51&2/25$'25(*,21$/$,53257 :+(5($6 LQ WKH&LW\ RI )RUW&ROOLQV DQG WKH&LW\ RI/RYHODQG WKH ³&LWLHV´ :+(5($6SXUVXDQWWRWKH,*$WKH&LW\RI/RYHODQGKROGVRQEHKDOIRIERWK&LWLHVWKH UHYHQXHV RI DQG RWKHU ILQDQFLDO FRQWULEXWLRQV WR WKH $LUSRUW LQ D IXQG ZKLFK LQFOXGHV XQDSSURSULDWHGDQGXQHQFXPEHUHGUHVHUYHV WKH³$LUSRUW)XQG´ ,QWURGXFHGFRQVLGHUHGIDYRUDEO\RQILUVWUHDGLQJDQGRUGHUHGSXEOLVKHGWKLVWKGD\RI 2FWREHU$'DQGWREHSUHVHQWHGIRUILQDOSDVVDJHRQWKHWKGD\RI1RYHPEHU$' BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 0D\RU $77(67 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB &LW\&OHUN 3DVVHGDQGDGRSWHGRQILQDOUHDGLQJRQWKHWKGD\RI1RYHPEHU$' BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 0D\RU $77(67 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB &LW\&OHUN 1 RESOLUTION # R-6-2019 A RESOLUTION APPROVING THE 2020 AIRPORT BUDGET AND RECOMMENDING APPROVAL BY THE CITY COUNCILS OF FORT COLLINS AND LOVELAND WHEREAS, the City of Fort Collins (“Fort Collins”) and the City of Loveland (“Loveland”) jointly own and operate the Northern Colorado Regional Airport (the “Airport”) pursuant to that Amended and Restated Intergovernmental Agreement for the Joint Operation of the Fort Collins-Loveland Municipal Airport (the “IGA”), dated January 22, 2015, as amended; and WHEREAS, pursuant to the IGA, the two Cities formed the Northern Colorado Regional Airport Commission (“Commission”) and granted the Commission certain authority, including the authority to develop the Airport budget; and WHEREAS, the two Cities reserved to themselves the authority to approve the annual Airport budget and the authority to approve each Cities’ annual contributions to and appropriation of the Airport budget; and WHEREAS, Airport staff has prepared the annual Airport budget for fiscal year 2020 (the “2020 Airport Budget”) and the Commission has reviewed the 2020 Airport Budget, which is attached hereto as “Exhibit A” and incorporated herein; and WHEREAS, after such review, the Commission approves the 2020 Airport Budget, and recommends approval by the two City Councils along with appropriation of the necessary funds for such 2020 Airport Budget. NOW THEREFORE BE IT RESOLVED BY THE NORTHERN COLORADO REGIONAL AIRPORT COMMISSION AS FOLLOWS: Section 1. That the 2020 Airport Budget attached hereto as “Exhibit A” is hereby approved. Section 2. That the Commission recommends that the Fort Collins City Council and the Loveland City Council each approve the 2020 Airport Budget. The Commission further recommends that the City Councils approve each City’s annual contributions to and appropriation of the 2020 Airport Budget. Section 3. That this Resolution shall be effective as of the date and time of its adoption. EXHIBIT A 2015 Actual 2016 Actual 2017 Actual 2018 Actual 2019 Budget 2020 Budget OPERATING REVENUES Hangar Rental 103,211 109,066 115,834 117,155 122,000 150,000 FBO Rent 69,486 78,216 78,216 98,060 88,250 88,250 Gas and Oil Commissions 148,955 119,168 152,779 199,017 155,000 180,000 State & County Aircraft Fuel Tax 70,292 88,103 107,181 112,080 112,000 113,000 Land Lease 185,497 207,553 193,554 232,541 235,000 644,000 Terminal Lease and Landing Fees 6,157 12,682 11,087 8,342 11,000 9,000 Parking 12,850 10,595 13,595 12,850 12,000 10,000 Miscellaneous 20,385 15,953 31,585 31,168 21,500 18,900 TOTAL OPERATING REVENUES 616,833 641,336 703,831 811,213 756,750 1,213,150 OPERATING EXPENSES Personal Services 383,813 443,315 549,856 552,509 649,532 703,430 Supplies 38,162 41,753 41,130 55,943 63,000 74,500 Purchased Services 323,364 363,855 364,460 1,111,515 557,882 514,960 TOTAL OPERATING EXPENSES 745,339 848,923 955,446 1,719,967 1,270,414 1,292,890 OPERATING GAIN (LOSS) (128,506) (207,587) (251,615) (908,754) (513,664) (79,740) NONOPERATING REVENUES (EXPENSES) City Conributions 355,000 405,000 520,000 485,000 355,000 0 Passenger Facility Charge 878 0 0 0 0 0 Interest Income 22,177 8,584 25,965 31,930 20,000 20,000 Capital Expenditures (1,100,931) (1,187,394) (878,970) (986,124) (989,250) (1,481,000) TOTAL NONOPERATING REVENUES (EXPENSES) (722,876) (773,810) (333,005) (469,194) (614,250) (1,461,000) NET INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS (851,382) (1,292,271) (584,620) (1,377,948) (1,127,914) (1,540,740) Capital Contributions 863,207 985,995 831,535 986,124 892,500 922,000 CHANGE IN NET POSITION 11,825 (306,276) 246,915 (391,824)(235,414)(618,740) Reserve Appropriation 335,000 335,000 500,000 500,000 2020 Airport Budget DQG :+(5($6WKH&LW\¶VVKDUHRIWKH$LUSRUWRSHUDWLQJFRVWVWREHKHOGLQWKH $LUSRUW)XQGLVDQG :+(5($6IXQGLQJIRUWKHFDSLWDOLPSURYHPHQWVKDVEHHQLGHQWLILHGDVIROORZV )$$*UDQW 6WDWH*UDQW $LUSRUW5HYHQXHV $LUSRUW5HVHUYHV 7RWDO DQG 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