HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 11/04/2020 - FIRST READING OF ORDINANCE NO. 127, 2020, ADOPTING Agenda Item 3
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AGENDA ITEM SUMMARY November 4, 2020
City Council
STAFF
Jason Licon, Airport Director
Judy Schmidt, Legal
SUBJECT
First Reading of Ordinance No. 127, 2020, Adopting the 2021 Budget and Appropriating the Fort Collins Share
of the 2021 Fiscal Year Operating and Capital Improvements Funds for the Northern Colorado Regional
Airport.
EXECUTIVE SUMMARY
The purpose of this item is to adopt the 2021 budget for the Northern Colorado Regional Airport and
appropriate Fort Collins’ share of the 2021 fiscal year operating and capital funds for the Airport. Under the
Amended and Restated Intergovernmental Agreement for the Joint Operation of the Airport between Fort
Collins and Loveland (the “IGA”), the Airport is operated as a joint venture with each City owning 50% of the
assets and revenues and responsible for 50% of the operating and capital costs. The proposed budget does
not include financial contributions from the City’s General Fund as it has in previous years because anticipated
Airport revenues will provide sufficient revenues for operations, primarily as a result of the Northern Colorado
Law Enforcement Training Center Lease payments by both Cities. Because each City has an ownership
interest in 50% of the Airport revenues, each City must appropriate its 50% share of the annual operating and
capital budget for the Airport under the IGA.
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 policy-making 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
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 2020 State of Colorado
study, the Northern Colorado Airport provides a regional economic impact of approximately $295.97 million
and 1,072 jobs 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
Agenda Item 3
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projects from the Federal Aviation Administration and the Colorado Department of Transportation Division of
Aeronautics.
This Ordinance appropriates the City’s 50% share ($733,943) of the 2021 Airport operating budget
($1,467,886) and 50% share ($2,783,000) of the 2021 capital budget ($5,566,000), for a total appropriation of
$3,516,943 by the City. The City of Loveland will be appropriating the other 50% of the total 2020 Airport
budget ($3,516,943). 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 of a new commercial terminal building and associated support infrastructure, and the
repaving of an existing aircraft taxiway.
Financial resources for 2021 are expected from the sources listed below. These include external sources, such
as federal and state grants and required grant matches, as well as airport revenues and reserves. These
resources will provide the necessary funding for the 2021 operating and capital budgets, and then some:
FAA Grants $6,335,000
State Grants $ 152,000
Airport Revenues $1,338,826
Airport Reserves $1,000,000
Total $8,825,826
The $1,000,000 item is an appropriation for use by the Northern Colorado Regional Airport Commission
consistent with the approved 2021 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 2021 Airport Budget and
recommended it for approval by the Fort Collins and Loveland Councils on September 17, 2020. Loveland’s
City Council has considered and approved the 2021 Airport budget, with First Reading on October 6, 2020 and
Second Reading on October 20, 2020.
CITY FINANCIAL IMPACTS
This item appropriates the City’s 50% share of the annual budget for fiscal year 2021 for the Northern
Colorado Regional Airport, which totals $3,516,943 and is 50% of the $7,033,886 total combined 2021 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 provide for a sustainable
revenue source, primarily as a result of the Northern Colorado Law Enforcement Training Center Lease
payments by both Cities. The City of Loveland manages the Airport’s budget and finances under the IGA;
however, each 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.
ATTACHMENTS
1. Airport Commission Resolution (PDF)
ATTACHMENT 1
17th
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ORDINANCE NO. 127, 2020
OF THE COUNCIL OF THE CITY OF FORT COLLINS
ADOPTING THE 2021 BUDGET AND APPROPRIATING THE FORT COLLINS
SHARE OF THE 2021 FISCAL YEAR OPERATING AND CAPITAL IMPROVEMENT
FUNDS FOR THE NORTHERN COLORADO REGIONAL 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, 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 in Airport assets and revenues, 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 dated June 7, 2016, (collectively, 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 proposed budget does not include financial contributions from the City’s
General Fund as it has in previous years because anticipated Airport revenues will provide
sufficient revenues for operations, primarily as a result of the Northern Colorado Law
Enforcement Training Center Lease payments by both Cities; and
WHEREAS, because each City has an ownership interest in 50% of the Airport revenues
held and disbursed by the City of Loveland as an agent on behalf of the Cities, each City must
appropriate its 50% share of the annual operating and capital budget for the Airport under the
IGA; 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 2021
Airport budget totaling $7,033,886, of which the City’s 50% share is $3,516,943 ($733,943 for
operations and $2,783,000 for capital); and
WHEREAS, the City Council is in the process of considering the City’s 2021 budget and
Ordinance No. 138, 2020, which appropriates $186,173 in City funds to be transferred to the
Airport operating fund in payment of the City’s share of the rent due under the Lease of a portion
of the Airport property for construction and operation of the Northern Colorado Regional Law
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Enforcement Training Center, which amount is included in the Land Lease revenues set forth in
the 2021 Airport Budget; 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
WHEREAS, funding for the Airport’s 2021 operating and capital improvement budgets
has been identified as follows:
FAA Grant $6,335,000
State Grant 152,000
Airport Revenues 1,338,826
Airport Reserves 1,000,000
Total $8,825,826; and
WHEREAS, the City’s 50% share of the 2021 Airport operating costs, to be held in the
Airport Fund, is $733,943; and
WHEREAS, the City’s 50% share of the 2021 Airport capital improvement costs, to be
held in the Airport fund, is $2,783,000; and
WHEREAS, the Airport Reserves item is an appropriation for use by the Northern
Colorado Regional Airport Commission for discretionary Airport projects; and
WHEREAS, City Finance staff has reviewed the financial statements for the Airport and
determined that the requested appropriation of Airport Reserves in the 2021 Airport Budget
meets the required limits set forth in the IGA; and
WHEREAS, this appropriation will not require additional funding from the Cities and is
consistent with the IGA.
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 and adopts the 2021 Airport
operating and capital budget totaling $7,033,886 ($1,467,886 for operations and $5,566,000 for
capital), a copy of which is attached hereto as Exhibit “A” and incorporated herein by reference.
Section 3. That the City Council hereby appropriates in the Airport Fund $733,943 to
be expended to defray the City’s 50% share of the 2021 operating costs of the Airport.
Section 4. That the City Council hereby appropriates in the Airport Fund $2,783,000
to be expended to defray the City’s 50% share of the 2021 capital costs of the Airport.
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Introduced, considered favorably on first reading, and ordered published this 4th day of
November, A.D. 2020, and to be presented for final passage on the 17th day of November, A.D.
2020.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
Passed and adopted on final reading on the 17th day of November, A.D. 2020.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
2021 Airport Budget
2017 Actual 2018 Actual 2019 Actual 2020 Budget 2021 Budget Justification
Percent
Change
OPERATING REVENUES
Hangar Rental 115,834 117,155 131,782 150,000 215,000 Increase to account for additional acquired hangar revenues 30.2%
FBO Rent 78,216 98,060 88,336 88,250 96,287 Adjusted to reflect lease amount 8.3%
Gas and Oil Commissions 152,779 199,017 190,731 180,000 165,000 Reduced to account for projected fuel cost -9.1%
State & County Aircraft Fuel Tax 107,181 112,080 137,981 113,000 103,500 Reduced to account for projected fuel cost -9.2%
Land Lease 193,554 232,541 650,497 644,000 670,539 Adjusted for new leases, CPI, & NCLETC lease 4.0%
Terminal Lease and Landing Fees 11,087 8,342 8,229 9,000 9,000 No change 0.0%
Automobile Parking 13,595 12,850 11,240 10,000 10,000 No change 0.0%
Miscellaneous 31,585 31,168 39,467 18,900 19,500 Tied to airline activity and security fees 3.1%
TOTAL OPERATING REVENUES 703,831 811,213 1,258,263 1,213,150 1,288,826 Total 5.9%
OPERATING EXPENSES
Personal Services 549,856 552,509 596,509 703,430 734,737 Increased in accordance with budgetary core costs 4.3%
Supplies 41,130 55,943 72,675 74,500 85,000 COVID impact planning, aging infrastructure support 12.4%
Purchased Services 364,460 1,111,515 732,671 514,960 648,149 Additional FTE , utility rate increases, and Remote Tower support 20.5%
TOTAL OPERATING EXPENSES 955,446 1,719,967 1,401,855 1,292,890 1,467,886 Total 11.9%
OPERATING GAIN (LOSS)(251,615)(908,754)(143,592)(79,740)(179,060)
NONOPERATING REVENUES
(EXPENSES)
City Conributions 520,000 485,000 0 0 0 City Contributions converted to a land lease for the NCLETC in 2019 0.0%
Interest Income 25,965 31,930 118,764 25,000 50,000 Adjusted to reflect reserve amounts 50.0%
Capital Expenditures (878,970)(986,124)(989,250)(1,481,000)(5,566,000)Increased for capital improvement projects; primarily grant funded 73.4%
TOTAL NONOPERATING REVENUES
(EXPENSES)(333,005)(469,194)(870,486)(1,456,000)(5,516,000)
NET INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS (584,620)(1,377,948)(1,014,078)(1,535,740)(5,695,060)
Capital Contributions 831,535 986,124 204,480 922,000 6,487,000 Increased for anticiapted federal grant funding 85.8%
CHANGE IN NET POSITION 246,915 (391,824)(809,598)(613,740)791,940 Driven by grant funding 177.5%
Reserve Appropriation 335,000 335,000 500,000 500,000 1,000,000 Amount appropriated through IGA for NCRAC use 50.0%
EXHIBIT A