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HomeMy WebLinkAbout2010-053-08/17/2010-AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT REGARDING ALLEGIANT AIR, LLC SERVICE FROM FORT RESOLUTION 2010-053 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT REGARDING ALLEGIANT AIR, LLC SERVICE FROM FORT COLLINS-LOVELAND MUNICIPAL AIRPORT TO MESA, ARIZONA f WHEREAS, the Cities of Fort Collins and Loveland(the "Cities")jointly own and manage certain real property in Larimer County that is the site of the Fort Collins-Loveland Municipal Airport (the "Airport"); and WHEREAS, Allegiant Air, LLC ("Allegiant") and the Cities are parties to an Agreement dated June 16, 2003, as amended by a First Amendment dated January 19, 2005 (collectively, the "2003 Agreement")pertaining to Allegiant's current scheduled airline service to Las Vegas,Nevada (the "Existing Service"); and WHEREAS,the Cities have been approached by Allegiant to expand scheduled service into and out of the Airport beyond the Existing Service currently provided to include two scheduled flights per week of commercial passenger service from the Airport to Mesa,Arizona(the"Additional Service") on the terms and conditions set forth in a proposed"Agreement Regarding Allegiant Air, LLC Service from Fort Collins-Loveland Municipal Airport to Mesa, Arizona"(the"Agreement"), a copy of which is attached hereto as Exhibit"A" and incorporated herein by this reference; and WHEREAS,the proposed Additional Service is consistent with the Airport's current Master Plan which forecasted continued commercial service from the early 1990s and well into the future; and WHEREAS, the City Council believes that the Additional Service will serve the public purposes of providing significant social and economic benefits to the citizens of the City,primarily in the form of increased access to airline services,jobs,economic development,and increased airport revenues and,therefore, the monetary incentives included in the Agreement are in the best interests of the public and the City. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS, as follows: Section 1. That the City Council believes that the Additional Service will serve the public purposes of providing significant social and economic benefits to the citizens of the City, primarily in the form of increased access to airline services, jobs, economic development, and increased airport revenues and,therefore,the monetary incentives included in the Agreement are in the best interests of the public and the City. Section 2. That the City Manager is hereby authorized and directed to execute the Agreement on behalf of the City in substantially the form shown on Exhibit "A", along with such additional terms and conditions as the City Manager,in consultation with the City Attorney,deems necessary and appropriate to protect the interests of the City. Section 3. That the City Council hereby ratifies and confirms the 2003 Agreement. Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 17th day of August A.D. 2010. A��V• I ayor ATTEST: City.Clerk V EXHIBIT A AGREEMENT REGARDING ALLEGIANT AIR, LLC SERVICE FROM FORT COLLiNS- LOVELAND MUNICIPAL AIRPORT TO MESA, ARIZONA This agreement, made and entered into this day of , 2010, is by and between the CITY OF LOVELAND, COLORADO, a municipal corporation, the CITY OF FORT COLLINS, COLORADO, a municipal corporation, hereinafter collectively referred to as "the Cities," and ALLEGIANT AIR, LLC, a Nevada limited liability company, hereinafter referred to as "Allegiant"; WITNESSETH:, WHEREAS, the Cities jointly own and manage certain real property in Larimer County that is the site of the Fort Collins-Loveland Municipal Airport (the "Airport"); and WHEREAS, Allegiant and the Cities are parties to an Agreement dated June 16, 2003, as amended by a First Amendment dated January 19, 2005, both of which are attached hereto as Exhibit A (collectively, the "2003 Agreement") pertaining to Allegiant's current scheduled airline service to Las Vegas, Nevada (the "Existing Service"); and WHEREAS, the Cities have been approached by Allegiant to expand scheduled service into and out of the Airport beyond the Existing Service currently provided to include two scheduled flights per week of commercial passenger service from the Airport to Mesa, Arizona(the "Additional Service"); and WHEREAS, the Cities acknowledge that certain benefits to the Airport and the communities will result from such Additional Service; and WHEREAS, the proposed Additional Service is consistent with the Airport's current Master Plan which forecasted continued commercial service from the early 1990s and well into the future. NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and other good and valuable consideration, the parties hereto agree as follows: 1. Commencement of Scheduled Air Service. Starting no later than Allegiant will begin providing the Additional Service, to include no less than two scheduled flights per week of commercial passenger service from the Airport to Mesa, Arizona using MD 80, 83 and MD 87 aircraft. The Additional Service shall be provided in addition to the Existing Service currently provided by Allegiant from the Airport to Las Vegas, Nevada. Once the Additional Service from the Airport has begun, Allegiant may discontinue the Additional Service at any time. A reduction in the minimum of two flights per week included in the Additional Service or a discontinuance of the Additional Service within 6 months following commencement shall, at the Cities' option, relieve the Cities of their obligations under this Agreement. 2. Advertising Costs. The Cities shall reimburse Allegiant for up to $30,000 of the direct costs Allegiant incurs to third party advertisers before the first scheduled flights included in the Additional Service to advertise and promote the Additional Service from the Airport. Prior to starting advertising, Allegiant shall advise the Cities of Allegiant's general advertising plan and the anticipated budget for the period of time from the start of advertising to the first scheduled flight. The Cities prefer that a portion of the funds be spent with a third party firm in Northern Colorado. The Cities shall make payment to Allegiant for the amounts provided herein within thirty (30) days after receipt and approval of invoices submitted by Allegiant, which invoices shall be submitted to Cities not more frequently than monthly and which shall identify the specific advertising costs for which reimbursement is requested. 1 3. Reimbursement of Advertising Costs. If Allegiant does not begin its Additional Service at the Airport on or before , Allegiant shall repay to the Cities one-half of all advertising reimbursement monies previously paid to Allegiant by the Cities (the "Repayment"). Such Repayment shall be made by Allegiant to the Cities no later than If Allegiant begins its Additional Service as required in paragraph one above, and maintains a minimum of two flights per week for the following six months, Allegiant shall have no further obligation for the Repayment to the Cities. For each full month after Allegiant begins the Additional Service as required in paragraph one above, and maintains a minimum of two flights per week, the Repayment shall be reduced by 1/61h. For example, if the Cities reimburse Allegiant for $28,000.00 in direct costs of third party advertising in accordance with Paragraph 2 above and Allegiant does not begin the Additional Service at the Airport on or before the required date, it shall pay to the Cities the Repayment in the entire amount of$28,000.00. If Allegiant begins the Additional Service as required in paragraph one above, and maintains a minimum of two flights per week for a period of three full months before discontinuing or reducing the Additional Service, then the Repayment will be reduced by 3/61hs and Allegiant shall pay to the Cities an amount equal to $14,000 4. Temporary Fee Waivers. During the first six months of Allegiant's Additional Service from the Airport, the Cities will waive for each flight to Mesa, Arizona (but not for the Existing Service to Las Vegas, Nevada) the Airport's $50.00 fee for the aircraft rescue and firefighting services and its $50.00 fee for use of the Airport's terminal. The six-month period identified herein shall commence on.the day the first scheduled flight to Mesa, Arizona departs and end 180 days thereafter. 5. Passenger Waiting Area. The Cities will continue to provide at the Airport the existing enclosed structure suitable for holding passengers once the passengers are through security screening, which structure is heated, air-conditioned and lighted, and has adequate seating, a podium for passenger services, a telephone and restroom facilities. 6. Law Enforcement Costs. Allegiant shall reimburse the Cities for all direct costs the Cities incur for law enforcement and security personnel required, now and in the future, by the Transportation Safety Agency ("TSA") to provide security screening for Allegiant's Additional Service, law enforcement officers in and around the terminal building and security required on the aircraft ramp area and parking lots including random vehicle inspections, except to the extent that any such costs are reimbursed to the Cities by TSA. Payments shall be made to the Cities by Allegiant within thirty (30) days of receipt of invoices submitted by the Cities, which invoices shall be submitted to Allegiant not more frequently than monthly and which shall identify the specific law enforcement and security costs for which reimbursement is requested. 7. Airport Fees. Allegiant shall pay all applicable airport fees with respect to the Additional Service as they currently exist and as they may hereafter be increased or decreased by the Cities. These current fees include a landing fee of$.58 per thousand pounds of aircraft certified gross landing weight and the current royalty fee collected by the Cities on fuel sold at the Airport. 8. Jet Fuel. Allegiant shall purchase a minimum of 1,000 gallons of jet fuel per flight included in the Additional Service from the Airport's Fixed Base Operator. This amount may be averaged over the total number of additional flights included in the Additional Service on a quarterly basis. The quarterly period (twelve weeks) set forth herein shall being on the first day scheduled flight included in the Additional Service to Mesa, Arizona departs from the Airport. If Allegiant does not purchase the minimum number of gallons of jet fuel as set forth herein, Allegiant agrees to pay the Cities five cents ($.05) per gallon of fuel for the remaining purchase obligation. Such payment shall be made within thirty (30) days from the end of the quarter for which the payment is owed. Allegiant shall provide documentation to the Cities on a monthly basis showing the amount of fuel purchased by Allegiant from the Airport's Fixed Base Operator for the Additional Service. 2 9. Compliance with applicable laws. At all times during its operations in and out of the Airport Allegiant shall comply with all applicable federal, state and local laws. 10. Execution Date. The execution date of the Agreement will be the date that this Agreement is signed by the last of the parties to sign this Agreement. I I. Remedies. In the event that a party breaches its obligations under this Agreement, as determined by a court of competent jurisdiction, the injured party shall be entitled to monetary damages, equitable relief, including specific performance, and such other remedies at law or in equity as may be available under applicable law. In the event of litigation relating to or arising out of the Agreement, the prevailing party, whether plaintiff or defendant shall be entitled to recover costs and reasonable attorneys' fees. 12. No Waiver. Notwithstanding anything to the contrary, no term or covenant herein shall be construed or interpreted as a waiver, either express or implied, of any of the immunities, rights, benefits or protection provided to either of the Cities under the Colorado Governmental Immunity Act, including, without limitation, any amendments to such statute, or under any similar statute which is subsequently enacted. 13. No Multiple-Fiscal Year Debt. The parties intend that this Agreement comply with the provisions of Article X, Section 20 of the Constitution of the State of Colorado, and acknowledge that neither of them will have any obligation to fund the financial obligations under this Agreement other than for the current fiscal year. No provision of this Agreement shall be construed as creating indebtedness or any multiple-fiscal year direct or indirect debt or other financial obligation whatsoever by the parties within the meaning of any constitutional or statutory debt limitation. 14. Assignment of Benefit. Allegiant shall not assign this Agreement to any person without the prior written consent of the Cities. 15. Severability. If any provision in this Agreement or the application of such provision to any person or circumstance shall be invalid, illegal or unenforceable, the remainder of this Agreement of the application of such provision to persons or circumstances other than those to which it is invalid, illegal or unenforceable shall not be affected thereby. 16. Governing Law and Venue. This Agreement shall be governed by and enforced in accordance with the laws of the State of Colorado. In addition, the parties hereto acknowledge that there are legal constraints imposed upon the Cities by the constitutions, statutes, and rules and regulations of the State of Colorado and of the United States, and imposed upon the Cities by their Charters and Codes, and that, subject to such constraints, the parties intend to carry out the terms and conditions of this Agreement. Notwithstanding any other provisions of this Agreement to the contrary, in no event shall the parties hereto exercise any power or take any action which shall be prohibited by applicable law. Whenever possible, each provision of this Agreement shall be interpreted in such a manner so as to be effective and valid under applicable law. Venue for any judicial proceeding concerning this Agreement shall be in the District Court for Larimer County, Colorado. 17. Entire Agreement. This Agreement contains the entire agreement of the parties relating to the Additional Service. The Cities shall not be obligated to pay any costs not identified in this Agreement. Any unforeseen costs required to provide Allegiant's flight operations from the Airport for the Additional Service shall be paid for by Allegiant. Except as provided herein, the Agreement may not be modified or amended except by written agreement of the parties. 18. Headings. Paragraph headings used in the Agreement are for convenience of reference and shall in no way control or affect the meaning or interpretation of any provision of this Agreement. 3 i 19. Notices. All correspondence between the parties shall be directed to the following and shall be deemed received when hand-delivered or three (3) days after being sent by certified mail, return receipt requested: If to Loveland: Name: Title: Address: If to Fort Collins: Name: Title: Address: If to Allegiant: . - Name: Title: Address: 20. Binding Agreement. This Agreement shall be binding upon and inure to the benefit of the parties' respective successors and assigns. 21. 2003 Agreement. This Agreement sets forth the independent obligations and agreements between the parties with respect to Allegiant's Additional Service to Mesa, Arizona and shall not be deemed to terminate, modify or otherwise amend the 2003 Agreement. IN WITNESS WHEREOF, the parties have hereunto set their hands the day and year following their signatures. CITY OF LOVELAND, COLORADO By: Title: Date: ATTEST: City Clerk APPROVED AS TO FORM: Deputy City Attorney 4 CITY OF FORT COLLINS, COLORADO By: Title: Date: ATTEST: City Clerk APPROVED AS TO FORM: Deputy City Attorney ALLEGIANT AIR, LLC By: Title: Date: ATTEST: Secretary 5 2003 AGREEMENT (7 pages) 6