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HomeMy WebLinkAboutStaff Report 5.E 04/03/2006CITY OF PETALUNIA, CALIFORNIA 5. AGENDA BILL April 3, 2006 Aeenda Title: Meetine Date: Resolution Approving an Increase in the Rental Rate for the Ten April 3, 2006 Existing Executive Hangars at Petaluma Airport Meetine Time: © 3:00 PM ❑ 7:00 PM Cateeory (check one): Consent Calendar ❑ Public Hearing ❑ New Business ® Unfinished Business F-1Presentation Dtteuartment: Director: Contact Person: Phone Number: Public Works inMarengo Mike Glose 778-4404 3.z�.oc Cost of PYODOsal: N/A6 Account Number: N/A Amount Budeeted: N/A Name of Fund: N/A Attachments to Aeenda Packet Item: 1. Resolution 2. Support Material to Justify Hangar Rents Summary Statement: At its February 2, 2006, meeting, the Petaluma Airport Commission recommended to increase rental rates for the existing executive box hangars in a two-step process over a two-year period, from $.295 per square ft. to $.325 per square ft., effective May 1, 2006, and increased to $.35 per square ft. effective May 1, 2007. All affected tenants have been notified by mail of the proposed increase. Recommended Citv Council Action/Sueeested Motion: City Council to approve the increased executive hangar rental rate to support operations, as recommended by the Airport Manager and Petaluma Airport Commission Reviewed by .Administrative S'k�c�el`to E Date: 3 (21 `-Todav'sDate: 03/21/06 Reviewelv itv Attornev: W ` Date: Revision # and Date Revised: Anm-py&l5v.City Manaeer: 0VDate: File Code: 5:\Airport Division Folder\CC Agenda & Grants Folder\Rate Increases\2006 Rate Increases & Establishment\2006 Existing Exec Rate Increase AB.doc Page 1 CITY OF PETALUMA, CALIFORNIA APRIL 3, 2006 AGENDA REPORT FOR RESOLUTION APPROVING AN INCREASE IN THE RENTAL RATE FOR THE TEN EXISTING EXECUTIVE HANGARS AT PETALUMA AIRPORT 1. EXECUTIVE SUMMARY: At its February 2, 2006, meeting, the Petaluma Airport Commission recommended to increase rental rates for the existing executive box hangars in a two-step process over a two- year period, from $.295 per square ft. to $.325 per square ft., effective May 1, 2006, and increased to $.35 per square ft. effective May 1, 2007. All affected tenants have been notified by mail of the proposed increase. 2. BACKGROUND: The Airport Cormnission has recommended that the hangar rates be increased to allow for adequate revenue to help offset the cost of operations. 3. ALTERNATIVES: a. Reduce the amount of increase. This will have a negative reflection on the level of services provided to the airport tenants and visitors. 4. Deny the increase. The airport would not be able to fully cover its operating expenses. 5. FINANCIAL IMPACTS: Denial of this request will put the airport in a potential operating deficit, which will require a reduction in services. 6. CONCLUSION: The rate increase is justified to help meet the current budgetary demands, and should be implemented as soon as possible. 7. OUTCOME OR PERFORMANCE MEASUREMENTS THAT WILL IDENTIFY SUCCESS OR COMPLETION. The rate increase will generate additional income necessary to maintain airport operations. 8. RECOMMENDATION: Pass the resolution for the increases as provided and recommended by the Airport Commission. Page 2 ATTACHMENT 1 APPROVING AN INCREASE IN THE RENTAL RATE FOR THE TEN EXISTING EXECUTIVE HANGARS AT PETALUMA AIRPORT WHEREAS, the Petaluma Airport Commission has reviewed and recommended an increase to the rental rates for the existing executive box hangars; and WHEREAS, the recommendation is for the increase to take place in two steps over a two year process; and WHEREAS, the affected airport tenants have been provided written notice of the proposed increases. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Petaluma hereby approves an increase in the rate schedule for the existing executive hangars, as described below. 1. An increase from $.295 per square ft. to $.325 per square ft., effective May 1, 2006. 2. An increase to $35 per square ft., effective May 1, 2007. Page 3 VAifAsi:IPi14ZhdK Comparison of Hangars at Petaluma Municipal Airport New T Hangars: 1. Are fire protected with sprinkler and alarm system. 2. Door height is 6 inches higher than our existing T hangars to accommodate a larger variety of aircraft. 3. Improved door design rollers to make doors easier to open and close. 4. Located in a commercial zone to allow aviation business to be operated in the hangar. Existing Box Hangars: 1. Larger dimensions than T hangars in length, width, and door height (16 or 18 feet compared to 10.5 or 12.5 feet for T hangars). 2. Can accommodate larger aircraft (wingspan, length, height). 3. Rectangular shape allows more space to develop office space, workshop, or storage. New Executive (Box) Hangars: 1. Are fire protected with sprinkler and alarm system. 2. Floor drains in hangars (drain into oil water separator) to allow aircraft washing within the hangar. 3. Sewer and water stubbed into hangar for hook-up for developing restroom. 4. Electrically operated bi-fold door. 5. Moisture barrier under concrete floor to allow floor painting or epoxy floor treatment. 6. Located in a commercial zone to allow aviation business to be operated in the hangar (storefront windows and business entrance). 7. Dedicated automobile parking adjacent to rear access door and business entrance. Page 4 Airport Hangar Rate Comparisons Airport Dimension Sq. Monthly Rate per Footage Rental Rate sq. ft. Byron Airport 50 x 50 2500 sf $825 $.33/sf Nevada County (Grass 50 x 48 2400 sf $11.75 $.49/sf Valley) South County 2973 sf $1,688.50 $.556/sf (San Martin) 1872 Hollister 60 x 60 3600 sf (stubbed $.52 sf water) McClellan Field 50 yr. old, 4000 sf $1600- $.40 - (Sacramento) open-ended $1800 $.45/sf Nut Tree (Vacaville) 40 x 50 2000 sf $460 $.23/sf Gnoss Field 50 x 120* 6000 sf $3000 $.50/sf (Marin County Airport) 40 x 50* 2000 sf $980 $.49/sf 60 x 80 4800 sf $2100 $.44/sf *water only Page 5 March 2006 Hangar Project Cost: Total Project Cost $5,513,110 72,000 sq.ft. hangar space = $76.57 per sq. ft. to build Box Hangar Cost Bldg 18 Foundation $110,000 Metal Structure $415,000 $525,000 Bldg 18 = 14,795 sq ft $525,000 / 14,795 = $35.49 sq ft to build T -Hangar Cost Bldg 15 Foundation $105,000 Metal Structure $375.000 $480,000 Bldg 15 = 16,254 sq ft $480,000 / 16,254 = $29.53 sq ft to build Page 6 �t Fi¢GJtLLLL311W Department of Transpor4ation Division of Aeronautics Airport Loan Program Revenue Generating Loan - Hangars PAGE 61101' Airport: Petaluma Date of Worksheet: 116105 Loan # "$320 covers other deb Cost per Hangar .. -. - . $25,455 Local Contribution ... 0 Number of Hangars 55 Total Loan Amount $1,400,025 Monthly Rent - Initial $307 Interest Rate ....... 5.0000 % Annual Rent Increase 3,00 % Years of Loan ...... 17 Monthly Rent, 17th Yr $493 Annual Payment to Caltrans Annual Accumulated Pro0tt(Loss) Year P6noipal Interest Total Income Annual Total MAY o6 1 $56,001 $70,001 $126,002 $202,620 $76,616 $76,616 ' 2 56,001 67,201 123,202 208,699 85,496 162,114 3 56,001 64,401 120,402 214,950 94,557 256,672 4 60,555 61,601 122,156 221,408 99,262 365,924 5 65,399 58,573 123,972 228,051 104,076 460,002 6 70,243 55,303 125,546 234,892 109,345 569,348 7 75,088 61,791 126,879 241,939 115,080 584,407 a 79,932 48,037 127,969 249,197 121,228 805,636 9 84,717 44,040 128,817 258,673 127,856 933,491 10 89,621 39,801 129,422 264,373 134,951 1,068,442 11 94,485 35,320 129,765 272,304 142,519 1,210,961 12 99,310 30,597 129,907 280,473 150,566 1,361,527 13 104,154 25,632. 129,786 288,888 159,102 11520,629 14 108,998 20,424 129,422 297,554 168,132 1,688,762 15 113,843 14,974 128,817' 306,481 177,664 1,866,426 16 118,687 0,282 127,969 315,875 187,707 2,054,132 17 66,950 3,348 70,298 325,146 254,848 2,308,980 Total $1,400,025 $700,328 $2,100,353 $4,409,333 $2,308,980 Post''•WAA akNa/te, c'°.iair'•0:b1j�(05 a�a�� E• r{ irn . �cumout k`I&_(,i,,U�NilAf�'/A • vnw,eM � iL+�.�.1u.t..=.,ProrcMq� Para � Page 7 I Dec 10, 2003 11:16 om Pmpnmd by Kelling Nonbm= & Nobrign (Fnanec5.003b;ldbclPedmccy:COP-AIRONLY,UIINSARB) Pagc5 NETDEBT SERVICE Ciq ofpemlume COP 2003 Refunding of 1993 COP Final Insured Page 8 Intemst Capimli=d Total Earnings Debt Service 111 f Ctbru Dm Principal lnmrest Debt Servine 'Swpins' Reserve Fmd 17/1104 02J01/2004 -1,143.23 1,I4333 08/0112004-_ 171,98359 171,98359 1,143M 4,57294 I01,47032 021012005-- 137586.88 137,586.88 4,572.94 54,388.9 r 08/012005 165,000 137,586.88 302486.88 4,57294 /021012006 1355243$ 135,52438 4,572.94 081012006 170.000 135,524.38 305,52438 4,57294 021012007 133,39938 133,39938 4,57294 08101/2007 170,000 133,39938 303,39938 4,572.94 021012008 131,27438 131,27438 4472.94 08/012008 175,000 131,27438 - 306,27438 4,57294 02/01/2009 128,99938 128,99938 457294 08/012009 180,000 128,99938 308,99938 4,57294 021012010 126.38938 126,38938 4,57294 081012010 185,000 126,3893B 311,38938 4,57294 021012011 123,42938 123,43938 4572.94 08!01/2011 190,000 123,42938 313,42936 457194 021012012 120,151.88 120,151,88 457294 08/012012 200,000 1201151.88 320,151,88 447294 021012013 116,351,88 11051.86 4,57194 08/012013 210,000 116,351.88 326,351.88 457294 021012014 1121151.88 112,151.88 457294 08/0112014 215,000 112,151.88 327,131.88 457294 021012015 107,74438 107,74438 4,57294 08/012015 225,000 107,74438 332,74438 4,57294 021012016 102,963.13 102,963.13 4,572.94 08/012016 235,000 102,963.13 337,963.13 4,572.94 071012017 97,851.88 97,851.88 4,57194 0510112037 250,000 97,851,88 347,851.88 4,57194 0J012019 92,28938 9-7,au8 4,57294 08/012018 260,000 92,289.38 352-18930 4,57194 021012019 86,37438 86,37438 4,57194 031012OI9 275,000 86,37438 361,37438 4572.94 021012020 - 79,911.86 79,911.88 457294 08/012020 285,000 79,91118 364911.86 4,57-194 07J0112021 73;14113 73,143.13 4,57194 081012021 300,000 73,143.13 373,143,13 4,572.94 02/012022 65,943.13 65,943,13 4,57294 08(012022 315,000 65,943.13 3B0,943.13 4572.94 021012023 58,30438 58,30438 4,57194 08/012023 335,000 58,3043B 393,30438 4,57294 021612024 50,096.88 50,096.88 457194 0BMI2024 350,000 50,096.88 400,096.88 4,572.94 02/012025 41,M.13 41,128.13 4572.94 08/012025 370,000 41,128.13 411,128.13 4,57294 OJOIP_026 31,646,88 31,646.88 457294 08/012026 390,000 31,646.88 421,646.88 4,57294 02J012027 21,653.13 21,653.13 4,57294 08/012027 410,000 21,653.13 431,653.13 4,57294 02012028 11,146.88 11,14688 4,57194 09/012023 435,000 11,146.&8 446,146.88 461,866.70 . 6,395,000 4,542,89633 10,837,89633 0.00 682511,05 155,858.41 Page 8 3-12-06 Notes for Year End Budget Pmjechon 20062006 YR End'05-96 REVENUE (+) Land lease, Hangar renls,Tledowns 527,670 47060 Salo of Oil 3,487 47110 Sale of 100LL 435,170 47130 Sale of Auto Fuel 519 47120 Sale of Jet Fuel 183,322 41120 Unsecured Property Tar 89,398 43410-20 Interest earnings 10,044 48010-50 Misc Revenue 1,749 Told Operating Revenue 1,251,359 EXPENSES(-) 51120-52230 Estates, Benefils?? 44,306 53010 Office Supplies 1,094 53080 Op SupplFuel(LL,UL,Jet) 406,231 53020-60 Repair & Visa Supp. 17,291 54110-61 ProffContr Services 49,833 54310-40 Bank and Lab Services 15,307 56620 Postage 249 56110-40 Telecom 814 56210-00 Miles, waler,elecldcal 35,304 56520-80 Meeting, travel, educ I'm 54210-50 Repairs, maintenance 15,017 See 54110 Memberships (AAAE) - 57350 Published Nellces7Ads 125 55010-40 Overhead Allocations. 108,950 56310-40 Equipment rental 155 5541D Insurance 22,350 57330 Bad Deb( - 57320 Teres 8,628 57310 Other special expense 5,213 Total Operating Expenses 734,677 OTHER FIN. SOURCES 3670 Slate Drente 0 3682 Federal Grants 0 57120 Inlerast payment ($378,107) 57110 Principal payment ($294,869) 61010 Assets . $5,000 - 6710 Fixed Asset Deprc, 0 7104 Capltal project 0 Total Other Fin Sources (572,976) EXCESS (DEFICIT) (156,294) Page 9