HomeMy WebLinkAbout2009-093-10/06/2009-ADOPTING THE AIRPORT BUSINESS PLAN FOR THE FORT COLUNS-LOVELAND MUNICIPAL AIRPORT RESOLUTION 2009-093
OF THE COUNCIL OF THE CITY OF FORT COLLINS
ADOPTING THI_` AIRPORT BUSINESS PLAN FOR THE
FORT COLLINS-LOVELAND MUNICIPAL AIRPORT
WHEREAS, the City ofFort Collins and the City of Loveland(the "Cities")jointly own and
operate the Fort Collins-Loveland Municipal Airport(the "Airport"); and
WHEREAS, in Judy 2006, the Cities adopted the Airport's Updated Master Plan which
determined the existing and future physical aviation needs to accommodate the anticipated
development of the Airport for the next 20 years; and
WHEREAS;after receiving considerable public input from stakeholder groups that represent
pilots, aircraft owners, Airport businesses and the surrounding business community, the Airport
Business Plan was developed; and
WHEREAS; the Airport Steering Committee has recommended adoption of the Airport
Business Plan; and
WHEREAS, the Airport Business Plan provides a strategy for the successful development
of the Airport and identifies the vision and goals of the Airport,evaluates governance options for the
Airport,maximizes federal and state funding for improvements,identifies methods to maximize the
development and revenue potential of Airport property, and develops strategies to implement the
plans necessary to accomplish the goals and objectives of the Airport; and
WHEREAS, the City Council has determined that it is in the best interests of the City that
the Airport Business Plan be adopted.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT
COLLINS that the Airport Business Plan for the Fort Collins-Loveland Municipal Airport, a copy
of which is attached hereto as Exhibit "A" and incorporated herein by this reference, is hereby
adopted.
Passed and adopted at a regular meeting of the Co t f the City of Fort Collins this 6th
day of October A.D. 2009.
Mayor
ATTEST
City Clerk
EXHIBIT A
Fort Collins • Loveland Airport
Business Plan
September 1, 2009
City of
Fort Collins Elm
City of Loveland
FORT COLLINS • LOVELAND
AIRPORT
EXHIBIT A
Table of Contents
1 - Executive Summary
2 - Introduction and Background
3 - Changes at the Airport and Aviation Statistics
4 - Fixed Base Operations Needs
5 - Land Use and Economic Development Opportunities
6 - Governance
7 - Ten Year Airport Finance Plan
Fort Collins - Loveland Airport SWOT Analysis
Strengths
• Full service FBO
• Land available for development of aviation businesses
• 8,500 foot runway meets most general aviation needs
• Excellent road access
• Located in strong growth area
• Good weather
• High quality of life
Weaknesses
• Length of runway does not meet all corporate aircraft and commercial service needs
• Age and appearance of facilities
• Inadequate infrastructure for expansion
• Two city governance L _
Opportunities
• Funding from State and Federal Government
• Through the Fence agreements to encourage strong public/private partnerships
• On airport economic opportunities are available and encouraged
Threats
• Economy
• Competition from nearby surrounding airports
EXHIBIT A
EXe c u t i ve S
aIy
Why prepare a business plan ?
Every outstanding business needs a road map to success
and the Fort Collins-Loveland Airport (FNL) is no
exception. The goal of the business planning effort is
to map current and future conditions and then apply
strategic plans to accomplish the critical goals of the
airport and the community owners.
The Fort Collins-Loveland Airport has not previously
developed or implemented a Business Plan. In 1993 and
again in 2006/2007, the Federal Aviation Administration
(FAA) and the two municipal owners completed an
FAA Master Planning Project. The goal of the Master
Planning Projects was " . . . prepared to assess and
direct improvements that will likely be necessary to
accommodate future aviation needs . . . a long-term plan
for . . . potential future facilities. " The Master Plan does
not identify critical components of a Business Plan,
notably:
• Business vision and goals;
• Funding plans, revenue and expenditure goals;
• Economic development principals;
• Encourage private investment;
• Operational success strategies; and
• Opportunities, both short and long-term,
for improvement.
This Business Plan document seeks to provide a
strategic plan for the success of FNL . The Plan will be
updated on a regular basis to support changes in the
airport, community, and business environment seeking
to be a living document guiding airport management
g ■ t and leadership .
FORT COLLINS • LOVELAND
- - AIRPORT
Q)
EXHIBIT A
Vision Statement
The Fort Collins - Loveland ( FNL ) Airport will be Colorado ' s premier
regional airport supporting general aviation , regional air carrier
services , and business opportunities for both aviation and
non - aviation uses .
The Goals of the Fort Collins - Loveland Airport
FNL will be a regional leader in providing competitive general
aviation services to the public, including corporate flight activities,
pilot training, and personal aviation. NV
FNL will provide outstanding opportunities as an investment engine Wjaqk. °
for aeronautical related business, including FBO services, vertical 04
facility investment, hangar operations, aeronautical operations, andLl
aircraft manufacturing and sales. Nip
FNL will provide economic development opportunities, both on and
off airport, through support of investment zones and appropriate
corporate incentives that support the mission of the airport and
community owners. The airport will seek to attract forward thinking
investors with sound business models who will be industry leaders
and attract investment and employment opportunities to the region.
FNL will seek to work with existing businesses to retain, expand, !V w
and attract opportunities for economic growth and vitality.
�•� FORT COLLINSLOVEIAND
FNL will strive to provide commercial airline services based on
appropriate regional market models and embrace new air carrier
market opportunities as the industry develops. u AIRPOU
FNL will seek to be a good neighbor with the surrounding
community by working actively with regional jurisdictions to secure mill
appropriate adjoining land uses and support public disclosure of _
aircraft activities in nearby residential development. The airport
will seek to operate within all industry standard and FAA noise w
abatement procedures and expect all operators to safely and a- �' ` - ' • ; ;.' " , . � '�?�` ; ';�1
responsibly operate within those parameters; including following 4
AOPA Noise Awareness Steps and manufacturer's abatement
procedures whenever consistent with safety.
FNL will invest all federal, state, and local monies in support of
a long-term capital and financial plan to maintain the highest
standards of airport infrastructure and in accordance with FAA
Regulations and to grow the airport to a self-sustaining enterprise
fund jointly owned by the City of Fort Collins and Loveland.
FNL will work within FAA, the Department of Agriculture, and EPA regarding air and water quality
�Z to promote an environmentally conscientious airport in support of greater community goals and to
improve the safety of air travel.
EXHIBIT A
Fort Collins Loveland Airport Business Plan Proposed Actions
Fixed Base Operator
1 . Renegotiate FBO lease to encourage investments and improve viability
2. Pursue significantly upgraded FBO facilities
3. Negotiate responsibility for new fuel farm (either Cities or FBO project)
4. Evaluate existing fuel surcharge — update if needed
5 . Negotiate with FBO to manage all on-airport leasing that the cities are currently performing
Re - negotiate the Triad Agreement
1 . Apply new Through the Fence (TTF) policies
2. Clarify appropriate aeronautical uses/businesses
3. Address appropriate fees for airport services
Economic Development
1 . Retain commercial broker to list on-airport properties
2. Develop marketing material on airport opportunities
3. Develop economic development focused web site for the airport
4. Implement a capital improvement plan (different than the Master Plan) to facilitate on-airport aviation
related businesses/uses
FNL Finances
1 . Adopt a goal of airport financial self-sufficiency by 2013
2. Adopt an enterprise fund model for the airport at a future time
3. Adopt 10-year financial plan for the airport by January 2011
4. Cities to continue to make appropriate financial contributions to support community goals
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EXHIBIT A
on and Backgrov
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trod
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How Does the Business Plan Compare to the Master Plan ?
The approved 2006/2007 Airport
Master Plan is an update to the 1993 Airport Master Plan Business Plan
Plan. The FAA funded the Master Plan
study to determine the existing and Formation of the long Establish strategies to
future aviation needs to accommodate achieve goals objectives
the anticipated development within term physical needs .
the next 20-year time frame . The • 20 year time frame • Mission of the airport
Master Plan addresses the long- . Determine aviation • Governance
range physical needs of the airport. needs
The primary goal is the continued • Funding
improvement of the airport in a • Address concerns of a . Maximize development
manner that is financially realistic and development plan and revenue potential
appropriate in the consideration of
its surroundings. The Business Plan
goes beyond where the Master Plan stops. The Business Plan establishes the strategies necessary for the Cities
to achieve the goals and objectives of the airport over the long-term. The Business Plan identifies the Vision and
Goals of the Airport, evaluates governance options to operate the airport, maximize Federal and State funding
to make improvements identified, identify methods to maximize the development and revenue potential of the
airport property, and develop strategies to implement the plans necessary to accomplish the goals and objectives.
Facilities Airport Statistics
The airport is a general aviation and commercial service
airport. The main airport facilities include a primary runway
with high intensity runway lights, full length taxiway with
medium intensity lighting system, an Instrument Landing
System, and a cross wind runway. The airport also has an
Automated Weather Observation System (AWOS); one size 1 , 100 Acres
Fixed Base Operator; passenger Terminal Building; Fuel
Storage facility; Aircraft Rescue and Fire Fighting Fire house Runway:
and fire equipment; and 10 businesses offering aviation Main 8,500' X 100'
related services from flight instruction to fuel sales, aircraft
maintenance, food services, and scheduled commercial Runway .
air service. Crosswind 21273' X 40'
Based Aircraft 245
4 Hangars 210
Tenant Provided Aviation Services
SalesFixed Based Operations
Fuel
Flight • �1
. and Helicopters ) 1 - - _.
AircraftAircraft Maintenance / Modifications / Upgrades
• Overhaul
Avionics • • • • • •
Aviation Weather/ Camera Systems Sales and Maintenance
Commercial Air Carrier
Hangar Ren
•
Envir • completed AirportMaster
The recently; h the FAA, j •
• • • • • plan was
Federal • '
4:17ililil
• the Airport Master
• •abide
L required to
Vvildlife management Plan it'
review and wildlife
• . draft
preparing Master . • 119
-planmanagement
• Recent Capital Projects n � r � •.
- - -- - Ji
1 � rrliroV _ rf
s
l:ndnerghcrr lit 55 New Private Hangars t.
. • ' � C
Al ETaxiway
t
• � � �� A`` Extension
Runway 6j:4 `/ 4
r Rehabilitation �0/
New Passenger ' • 'xA Taxiway Alpha Rehabilitation
g •Boarding Building NO. New Taxiway lighting System
•'. I � x�uca
y •S Ramp Area
Reconstruction Runway t5)33
- - � Detention Pond Air Carrier Ramp � Partial Reconstruction
Reconstruction Reconstruction >
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, , . V, -
MasterEXHIBIT A
Airport . . - Improvements
AirportThe • - - • approximately $141 million of . •
improvements by 2026. Significant airport improvements identified in
the Master Plan include: a 1,000 foot extension of the existing runway,
construction of a air traffic control tower), construction of a parallel runway,
development of additional hangars for aircraft storage and expansion of
aviation related businesses, aircraft ramp repair and expansions, storm water
drainage improvements, access road improvements, security fencing and
Capacity Levels and Operational History
000 152,000 280
1109000
000
11y000
Passenger Emplanernents Airport Landings and Take Offs Total Based Aircraft
Forecasts projected by Fort Collins Loveland Airport Master Plan
• Future Capital Projects_ �'4 - ®� .�' -
■ .T S •� . New FBO Facility
Construct New "P Entrance Road � - Construct toO.New Private
Entrance Road �' ,a ' �. � Hangars and New Business
Hangars
• � Reconstruct Parking Lots ti -__ - � • � N.,•. Ramp Area
( -• -�__ ; /, �„s'cm t ,000 Foot
� Construct New Terminal � � �' � _ � Runway Extension
Building Facility and
Offices for Tenants — — '—'- i
Construct New Ramp Areas � - >
�` ' Construct New � �'
_ Storm Water
f Detention Pond , �
f' New Parallel Runway t5/39
'r — —� and Taxiways and Lights r
®� New Air Traffic I `
Reconstruct Runway t5/;; Control Tower <_•� .c
and New Runway Lighting System � � ` `
EXHIBIT A
Aviation and qler 3
port Tr
ends
Based on FAA's 2008 to 2025 Aviation Forecasts, the increasing high fuel prices and concerns about the economy
are dampening the near-term prospects for the general aviation industry, but the long-term outlook remains
favorable. There continues to be a strong growth in business aviation demand driven by a growing U.S. and
world economy.
The number of general aviation hours flown is projected to increase an average of 3.0 percent a year through
2025. The FAA continues to be optimistic about the future. Since 2000, U. S. airlines have dealt with the impacts
of 9/11, heightened concerns about pandemics, the bankruptcy of four network carriers, and record high fuel
prices. In spite of these challenges, the number of passengers traveling has grown, demonstrating the value of air
transportation to the public. Last year, that number was a record 765 million and is on track to carry one billion
passengers by 2016. In addition, international traffic is growing at much faster rates than domestic traffic.
These national and international trends will also impact operations at FNL. The following highlights some of the
major trends:
• Growth in Airport Building Square Footage and Uses : The airport currently has a waiting list of
approximately 40 aircraft owners who want to lease one of the airport's 41 aircraft hangars. In addition, approximately
15 people are on a waiting list to lease ground to construct aircraft storage hangars for personal use. In 2007, the airport
constructed a new taxiway that will provide access to a 20-acre parcel of land reserved for hangar development and
the Cities will select a land developer to construct these improvements. Once the economy improves and the cost of oil
stabilizes, business and personal investment in the airport will gain momentum.
• New Pilots : The number of people starting to learn to fly has been on the decline. However, most new pilots are
entering the field for career opportunities and not for personal enjoyment as in the past. This trend is being addressed
by the pilot organizations and flight training businesses.
• Very Light Jets: The Very Light Jet, VLJ, is a new category of business jet that some feel will provide less
expensive and more convenient air travel for the business person. However, recent economic conditions are creating
obstacles for implementation. The VLJ is a much smaller corporate jet capable of carrying up to 4 passengers at
economical costs for flights generally less than 1,000 miles. The ability of the jet to land at small airports will increase
the convenience and savings in cost compared to commercial flights. The high costs of fuel will, for the airline industry,
reduce the frequency of flights to smaller communities and increase fares. This will improve the VLJ market. As traffic
and congestion getting to DIA increases on the I-25, and with the flexibility VLJ has to serve smaller market airports,
there is an opportunity to capitalize on this growing trend.
• Commercial Air Service: Commercial air service to Las Vegas and other niche markets will continue to be an
important service to our communities and a significant revenue stream for the airport. The addition of one or two other
airlines serving similar destinations in the future will improve service to the business/
private communities and further enhance revenues to the airport.
7
EXHIBIT A
Re p�
Estate Holdings , Fixe `
Operations , and Thr °vg�
Fen peratigce Lease Agreements
5
The Cities hired an aviation consultant, Airport Business Solutions, to evaluate the airport's real estate holdings,
the FBO lease agreement, and the "Through the Fence' agreements. The data and recommendations from the
report will assist the Cities in establishing policy to maximize development of airport property and encourage
private investment on the airport and on adjacent properties that have access to the airport's facilities.
Fixed Base Operation ( FBO ) Facility
A Fixed Base Operation or
FBO facility is the primary
business on an airport that
provides the basic services to -
the flying community, such • • 41 ! j
as fuel sales, aircraft tie- f
down, hangar storage, aircraft
maintenance, and flight _
instruction. The primary FBO - -
revenue source is fuel sales.
In 2007, 542,000 gallons of aviation fuel was sold; of this, 135,000 was 100LL/Avgas and 407,000 gallons of jet
fuel. Of the 407,000 gallons of jet fuel, 88% or 358,000 gallons are sold to transient turbine aircraft flying through
the area and making fuel stops. It is estimated that approximately 286,000 gallons of jet fuel is sold at true retail
prices. At this level of fuel sales and volumes, the economic return is marginal at best. This situation is further
exacerbated from the loss of fuel sales from self-fueling fuel farms that have been built on "Through the Fence"
property.
Recent record high prices of oil and retail aviation fuel prices have stifled the growth and sustainability of the
general aviation and commercial aviation. This is undercutting the primary revenue source of the FBO industry,
as well and further aggravates the financial viability of the airport's single FBO business. Furthermore, the
existing FBO facilities at the airport are old, outdated, and present a poor visual image to the general public and
air travelers.
The airport consultant, Airport Business Solutions, recommends that improvements to the FBO facility be made
to adequately compete within the regional marketplace. In order to create a viable investment opportunity
for improvements, new lease terms and conditions will be required. The consultant further recommends that
the new lease agreement with the FBO should be typical for the industry, and be structured in a manner that
encourages capital investment in facility upgrades, which are commensurate with projected fuel sales and
business activity.
CS )
EXHIBIT A
Existing Lease Terms, Conditions, and Rental Rates
The airport's existing lease terms, conditions, and rental rates are consistent with industry standards . Discussions
with airport tenants regarding the reversion of tenant improvements are ongoing.
"Through the Fence" Agreements
The report provided analysis of "Through
the Fence' agreements and what terms
and fees that should be included in
Access Agreements. Generally, the Access —
Agreements should contain provisions for
compliance with FAA Grant Assurances,
Airport Rules and Regulations, Airport
Minimum Standards, Transportation Security
Administration rules for access control, and
payment of access fees that are at parity with @ a g e @ —
similar developments located on the airport
property. The cities utilized data from the
Airport Business Solutions report and input
from stakeholders, including the FAA to
negotiate new through the fence agreements,
and will continue to pursue appropriate fee
structures for through the fence access .
Other Revenue Options
The airport consultant also suggested ideas where other revenues could be generated, some of which are
non-aviation. Suggestions include appropriate revenue leases, owning and operating the aviation fuel storage
facility, operating the FBO facility, and utilization of a real estate broker to market the airport property more
aggressively.
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9
EXHIBIT A
E�onornIc
5 �r�
ort
P
D
ment Opportuniti
evelop es
Fort Collins - Loveland Airport (FNL) is one of only fourteen commercial ,
airports in the State of Colorado. A recent study completed by the State of
nts
Colorado, which looked broadly at the economic impact of all airports in Sales Tax
the state identified that FNL is accountable for creating and maintaining Excise Tax
750 jobs, with an annual 2008 payroll of $22 million. Total direct and
indirect regional economic benefits created by the airport is $56 million Corporate Tax
per year. FNL is already producing significant economic benefit to the
region, but it can do a lot more in the future with a focused effort on L 17�A
promoting aviation related businesses on and off-airport.
Recent Development History '
Ai
e Retail Sales
Development over the past five years around FNLCO Income Tax
has principally been focused off-airport, with the vast Lodging"
majority of developments not having an aviation related Rental Cars
use. The commercial brokers that market off-airport
properties note that there is a strong industrial market
in Northern Colorado and that most inquiries for property
adjacent to FNL are focused on businesses that need warehouse/storage needs as well as access to I-25 .
There has been little on-airport development in recent years. In 2008, FNL began working with private
developers to construct two new on-airport hangar projects that will add over 50 individual aircraft
storage units.
A�
Market Needs
Impacts Impacts The cities recently approved a second "Through the Fence" agreement. FNL
is in a unique position for a smaller commercial airport in that there are
_rm.A L ample on-airport and off-airport properties that can be developed for aviation
and non-aviation uses.
Induced The State of Colorado's Economic Impact of Airports indicates that there has been
Impactssignificant growth in aviation related businesses around the state. FNL has not
significantly benefited from this growth in aviation related economic development,
is poised to do so in the future with some changes in how FNL is marketed to the
aviation related development community.
Fir Total 11
Economic
Impacts
10
EXHIBIT A
Marketing Strategy
Aviation Business Tax Credit Historically, the cities have not marketed
development opportunities in and around
The Fort Collins - Loveland Municipal Airport could see the airport. One of the key changes that
increased business activity after receiving a shot in FNL has to make to become financially
the arm from the state . Qualified employers on the self-sufficient is to improve its overall
airportrevenue through increased on-airport
now are eligible for $ 1 ,200 - per- employee
leases, TTF revenues, and maximizing
tax credit . Aviation businesses that locate at the other incomes streams like fuel sales and
airport or expand must employ at least 10 people to parking.
be eligible. The tax credits are good for five years,
per employee . The businesses are eligible for the There are several significant strategies
that need to be implemented to realize
tax credit each additional year in which full -time new potential revenue to FNL and to
employees are added . enhance aviation related businesses
Fort Collins Coloradoan - Saturday, January 20, 2007 around the airport.
These strategies includes,
1 . Develop marketing materials for on-airport properties
2. Engage a commercial broker to market on-airport properties
3. Aggressively pursue additional on-airport hangars
4. Develop a marketing section on the FNL web site
5 . Partner with off-airport developers to recruit aviation related businesses
6 . Attend aviation related economic development trade shows to market FNL
7. Benchmark aviation related development trends with regional commercial airports
8 . Encourage retention and expansion of existing businesses and new development
ins
• Expansion
00
100
JT
a. :
Future Buildings
Future Paving
11
EXHIBIT A
GoVernance
6 -
TPOwnership
The Fort Collins — Loveland Municipal Airport is jointly owned and operated by City of Fort Collins
and
the cities of Loveland and Fort Collins. Full control and decision-making authority Loveland
is placed with the City Councils of both cities. Under the current governance
structure, an Airport Steering Committee is charged with facilitating communication
between the cities and advising the Councils concerning Airport issues such as
general policies, land use budget, capital improvements and strategic planning. '
ns
g P � � g � p ' P g' P g• - -
Since beginning with the 1963 agreement to construct an airport and commencing
operations in 1965, the airport has tried a range of governance structures, including
an Airport Board, Ad Hoc Committee, Airport Authority and Joint Steering r7eeling Co
Committee . As one might expect, each governance model served its purpose at the 2 Mayors 7-tte
time it was implemented. 2 City Managers
Over time, changes in the growing cities and the airport facility itself have
necessitated reassessments and updates to the governance structure. Provide Direction
to Airport Staff
Refinements in the governance structure is ongoing. Several alternative
structures were examined . However, both cities recognize the important
asset of the airport and the opportunity for the airport to become an economic
engine which will contribute to the vitality of the community.
Alternative structures that were examined and subsequently dismissed include:
Airport Authority: The Fort Collins-Loveland Airport
was governed by an Airport Authority from
1983 — 2000, when it disbanded of its own volition.
The Authority had a very serious and ultimately
fatal flaw. It had the responsibility for operating One City Assumes Full Operational, Management
the Airport but not the authority. and Financial Responsibility: This governance
structure would have one of the two Cities assuming
full responsibility for the Airport. For this to
Privatization: In the United States, happen, the Cities would need to agree upon which
General Aviation airports the size of City is best suited to manage the Airport and one
Fort Collins—Loveland are generally City Council would need to turn over the majority
either owned by a municipality or of decision-making responsibilities for the Airport to
County. Privatization of airports may its peer City.
preclude funding from the FAA and
state.
Airport District: State legislation does not exist,
12
thus the Airport District concept is not an option.
EXHIBIT A
Governance Recommendations
Regardless as to which governance model is the best alternative, the current Joint Ownership/Steering
Committee governance model will remain for the future and both cities desire to see the Fort Collins
- Loveland Airport become a premier facility. Change is needed in order for the Airport to operate
effectively into the future. The following are basic recommendations .
• It is essential that the Cities engage in a straightforward review of the mission and vision of the
Airport. A serious discussion about the purpose of this facility today and the vision for its future
use is needed . This will provide a foundation for subsequent business plans and guide how the
Airport can continue to best serve the Fort Collins and Loveland communities and
surrounding region.
• The Steering Committee has no voting authority; all decisions go to two sets of elected officials.
Streamline the process by giving administrative and leasing authority to the Steering Committee.
• Continue to support the FNL Pilots Association, which includes representatives of the FBO,
businesses, and pilots and continue to provide the opportunity for the FNL Pilots Association to
report at each Steering Committee's meeting.
• Steering Committee and staff to continue to work pro-actively to mitigate redundancies in
oversight such as attorney review, selection of a preferred staff, or alternating staff.
l
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EXHIBIT A
Finance P� 7
den Year
Airport c,,�
The Fort Collins-Loveland Airport's (FNL) revenue picture did not change much over time until the
airport secured commercial air services through Allegiant Air. This new commercial service boosted
operating airport revenues and more importantly allowed the airport to access more Federal
Aviation Administration Funding for capital improvement projects . FNL has a detailed capital
improvement plan or Master Plan, but it does not have an
accompanying longer-term operating financial plan. Potential Revenue Sources: ff
• New Fixed Base Operator Lease
Part of the rationale for developing this business plan • Triad Through the Fence Agreement
is the need to develop a longer-term financial plan • Rocky Mountain Through the Fence Agreement
that projects revenue and expenditures for operating, • New Lease Revenue (South Hangars)
combined with the capital plan. This section of the
business plan outlines this financial plan, paying most attention to the options for enhancing
revenue for FNL . These include leasing more ground, implementing through the fence access fees,
and increasing commercial service while providing the services, facilities, and investment climate
that satisfies the expectations of all users and customers of the airport, while meeting the needs of
the airport owners.
The financial plan outlines projected revenue and expenditures for the coming 10 year period . There
are four specific revenue sources that were identified by staff and consultants that are addressed in
the business plan. These projections were forecasted on the conservative side for planning purposes .
Commercial Services
Commercial service provides major financial benefits to the airport including airline landing fees,
terminal use fees, passenger facility charges, automobile parking charges, and funding from the
FAA Airport Improvement Program. In 2008, this equated to $1 .3 million directly toward airport
operations .
As we go forward the airport should continue efforts
to support commercial service to assist in sustaining
and developing revenue to support regional economic
development. The long term benefit of commercial •
service is critical to the airports self sufficiency and
funding capital improvements . H
q:4)
EXHIBIT A
New Fixed Base Operator ( FBO ) Lease
Currently, the FBO lease produces $79,000 in revenue to the airport. The Airport anticipates negotiating
a new lease with the existing FBO for the construction of improvements to the existing facilities . The
final lease rates and terms should reflect the airports current and future business environment and the
FBO's revenue potential from fuel sales and other revenue sources.
. O Lease Areas
Hangar Leased Areas
A.
Triad Through the Fence Agreement
A Through the Fence Agreement has been in place for many years which covers the "Triad" area. Many of these
developments are not airport related, and some of the lots have lost access to the taxiways due to the manner in
which the properties developed. Current Triad owners with fuel farms pay fuel flowage royalties. In 2008, Triad
owners paid $276,000 for cross-wind runway maintenance. Triad owners do not pay access fees. The Airport seeks
to re-negotiate the Triad Agreement for a win-win relationship between Triad and the airport, and ensure parity
for FAA grant compliance .
Rocky Mountain Airpark Through the Fence Agreement
In 2008, the Airport entered in an agreement with Water Valley for the development of the Airpark of the Rockies
development. This Through the Fence Agreement outlined the access fee charges and expectations.
Per t e agreement with WaterValley or airport
access, the following revenue will be generated:
• 2011 - $50,000 (first year the project contributes revenue)
• 2020 - $400,000
15
EXHIBIT A
New Lease Revenue - South Hangar Development
The Airport has had a steady
backlog of demand for hangars The assumptions for this scenario are as follows:
that has gone unmet over time due
to the significant cost of providing . The gross for hangar development is 20 acres
infrastructure to undeveloped • The leasable area is 15 Acres
areas of the Airport for new • Begin leasing in 2014
hangar development. New • Assumption is 5 acres under lease at $.38/square foot = $83,000/annually
hangar development has to be a • Additional Leasing in 2017
higher priority in the future - to • Assumption is 5 additional acres under lease at $.41/square foot = $89,000/annually
facilitate the hangar development, • Additional Leasing in 2020
infrastructure has to be provided • Assumption is 5 additional acres under lease at $.45/square foot = $98,000/annually
by the Airport and it will have • Revenue assumed to begin in 2014
to be debt financed. Over time, • 2014 - $83,000
the infrastructure investment • 2020 - $172,000
*Assumes debt issuance of $3.0 M in 2012 to 2013 for infrastructure development
will provide a return to the . Debt service is $225,000/year
airport. A most likely scenario . 20 year issue at 5.25%
was development that outlines the
costs to provide infrastructure to Note: Actual infrastructure investment and resulting revenues will depend on market conditions.
the south of the existing hangar
development as well as the costs to
provide that infrastructure.
Summary
Through the implementation of the options to enhance revenues (leasing more ground, implementing through
the fence access fees, and increasing commercial service), it is projected that over the ten year period from 2010
through 2020, the Airport will receive $3.0 million in new revenue (after debt service for the South Hangars
has been accounted for, leasing more ground, implementing through the fence access fees, and increasing
commercial service) .
The Airport has options for enhancing revenue and becoming more self-sufficient - there are short and longer-
term options that can be taken that will not only improve airport operations, but will also provide much needed
funding for making improvements to the airport in general.
..
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16
EXHIBIT A
Airport Financial Forecasts 2010 - 2020
Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
OPERATING FUNDS
Beginning Balance 202,270 246,350 63,510 205,920 92,770 311,700 453,250 643,800 663,280 19048,090 967,930
REVENUES
Operating Revenue 128, 100 131,900 135,900 1409000 W5200 1489500 153,000 1579600 162,300 167,200 1729200
Gas, Oil Commissions K676 96,570 98,501 100,471 104,490 108,670 113,017 117,537 122,239 1270128 132,213
State Aircmll Fuel Tax 41,616 42,448 43,297 44,163 45,930 47,767 49,678 51,665 53,731 55,881 589116
1--Hangar Rental 1019500 10495UU 1079635 11U1864 114, 190 1179616 121J44 124,778 1289522 128,522 1289522
Land Lease 649000 649000 649000 64,000 64,000 649000 64,000 649000 649000 64,000 649000
Landing Fees 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000
Parking I80,000 220,000 225,000 240,000 248,000 256,000 263,000 271 ,000 279,000 279,000 279,000
Intrust 18,430 7.390 1 .910 62180 2. 780 9.350 13,600 19.310 191900 31 ,440 29.r40
Nen Revenue* 509000 1079421 146,860 1 225,800 371,302 421,879 550.425 6209993 662,606 7049242
"'Capital 0002 (3 , 1 (300,000) (500,000) (500,000)
TOTALOPERA'11 \C KF;\' E\UE 696322 4929229 811 , 103 rdt9,998 !X,7,390 1 , IJ1 ,2n5 1 ,21 ',; I % I ,o?�; t5 I ,d68,685 I ,n331 P 1 ,0%5,333
TOTAL REVENUES AND SOURCES 898„92 738,579 9049613 814;)18 1 ,060,160 1,152,905 1 ,070,5604 1,718,115 2,131,96.4 2,081 ,867 2,053,263
OPERATING EXPENSES
Aimort ODerritinst 652,241 675,070 698,697 723, 152 748,462 774,658 901,771 82%833 8589877 888,938 920,051
TOTALOPERATING EXPENSES 6.52,241 6759070 698,697 7231152 7499462 9991658 11026*771 19054A33 1 ,0839877 19113,938 1 /1459051
ENDING BALANCE OPERATING 246,35I 63,509 20i9916 92,767 3119698 1539247 643*796 663a82 1 ,048,088 967,929 908112
CAPITAL FUNDS
Beginning balance 3719580 370, 130 366,320 367,040 253,810 146,040 42,850 (534640) (144,710) (229,150) (3089380)
Passenger Facility Charges 126,000 152,000 156,000 161 ,500 166,400 170,400 176*500 181,300 187*300 191 ,857 196,986
FAA Grants - Entitlement I ,000,000 1,000,000 IV000,000 I ,000,000 11000,000 1 ,000,000 1,000,000 1,0001000 1,0009000 I ,000,000 I ,000,000
FAA Grants - Discresionary 4,000,000 3,000,000 3,000,000
State Grants 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000
Cities Contribution 120,000 12000 120,000
Interest 17,170 17,690 18,220 18,770 1 %330 19,910 20,510 21 , 130 21 ,760 22,410 23,080
Fope- NINE 30Wjd monpgmmTgrw
TOTALRE\' ENI ESANDSOURCES 558949750 21209,820 4v910,51() 21097,310 11699440 19586,350 1,489,80 1 ,698,790 1 ,314,350 41735*117 11661 ,686
Capital Funded by FAA and State Grants 5,250,000 1,250,000 4,250,000 1,2509000 11250,000 1 ,250,000 1,250,000 L 50,000 11250,000 4,250,000 I ,25%000
Passenger Facility Charge Projects 144,616 173,500 173,500 173,500 173,500 173,500 173,500 173,500 173,500 173,500 173,500
Capital Projects from Airport funding 120,000 120,000 120,000 120*000 120,000 1209000 120,000 120,000 120,000 1209000 120,000
Capital Projects funded by Private Contributions
TOTAL CAPITAL 5,5141616 1,8431500 4,543,500 11843,500 11543,500 1,5431500 11543,500 198439500 115431500 5,0431500 2,043,500
CAPITAL ENDING BALANCE 370,134 366,320 367,040 2539810 146v04O 421850 (53,640) (144,710) (229,150) (308,383) (381,814)
TOTAL FUNDS AVAILABLE 616,485 4299829 5721956 346,577 4.979738 496,097 590,156 518,572 8189938 6591546 526,398
New revenues include new land leases and through the once fees
Assumptions: Operating revcrreus increased 30u each year. Operating expenses inflate 3.5"o pet year. Interest is 3% of beginning balance in each year
Note: Depreciation Expense is noted here In order to maintain a real operating cash balance
Resources Used in the Development of the Fort Collins-Loveland Airport Business Plan
1 . Airport Master Plan Update Study
2 . Airport Minimum Standards for Commercial Aeronautical Services
3 . Capital Improvement Plan
4. Intergovernmental Agreement between the Cities of Fort Collins and Loveland 1
EXHIBIT A
4FORT COLLINS •
AIRPORT
t.