HomeMy WebLinkAboutStaff Report 09/12/2011 5.CDATE:
TO:
FROM:
Monday, September 12, 2011
A gevidev Item #5:C
Honorable Mayor and Members of the City Council through City Manager
Bob Patterson, Airport Manager
SUBJECT: Resolution Approving a,Rate Adjustment for the 'Four, Executive Hangars at the
Petaluma Municipal Airport
RECOMMENDATION
It is recommended that, the (City Council') adopt the attached” Resolution' Approving a Rate
Adjustment'for the four Ex-ecu"tive:Haiigars at the Petaluma Municipal Airport ("Airport")
BACKGROUND
The four Executive Hangars at the. Petaluma Municipal. Airport. ("Airport") were constructed in
2006: At, the time,of their construction, aviation .and the economy were strong and growing. For
the next' "three years the 'Executive Hangars experienced 3% annual rentincreases, and they all
:remained occupied until June of 2010. Since that time, due to the decline in the economy, three
of the four Executive Hangars have become vacant. Staff has,placed ads in the Press Democrat,
the Pacific Flyer (west coastaviation magazine),'and has written letters to large aircraft owners,
attempting to fill these hangars, all with no success.
The FY11/12 budget was drafted assuming a 5%vacancy rate for all City -owned hangars, but
does not include the vacant Executive Hangars. The Airport would experience a loss of $27,236
if the three ExecutiveiHangarsremain unoccupied this Fiscal Year: The Airport is currently
experiencing a 9.2% vacancy, rate, which includes the Executive Hangars.
DISCUSSION
The Petaluma Airport Commission, at its July 7, 2011 meeting, recommended adjusting the rates
of the four Executivel Hangars to-,, Hangars I SA -C $1,500 per month (currently $1,978);, and 18D,
$1,600 (current) . $2;096). The ,Commission reviewed hangar rates of comparable;'size and
amenities at'the Santa'.Rosa and Napa airports. When comparing. the rates of these two airports,
consideration was.given_ to what additional amenities were available there. Our Airport is
limited as to the length of the runway and type of instrument approaches during inclement
weather. Pricing the'Executive,Hangars.at rates above those airports with greater access during
weather conditions does not _seem prudent during these economic times: Staff has received
Agenda Review:
City Attorney Finance Direct City Manager
inquiries from two tenants on the field who are interested inmoving.'into these. larger hangars at
`
the- adjusted -rate. Thelone occupied hangar is subJecf to a month-to=month.leas
e, ,and its rate
should also be"adjus`te`d in accordance with FAA requirements- for non-di,scrimmation in rates and
services.
T1NANCIAL IMPACTS'
Reducing, the rate would enhance opportunities to lease hangar space. If fees and 'vacancy rates
remain unch'an ed; staff est'imate`s' a possible revenue shortfall exceed n' g.$27,236. The loss of
g,
revenue;'if three'Executive Harigars'remain vacant, would require cuts in services, and repairs for
the Airport.
If the ra't r the Executive'.Harigars is adjusted; aril the become occu ied; the ro•ect
e, for, y p p J ed
revenue for year would be.$`1,918,050 and expenses would be $J,912,300, leaving a positive
balance, of $5.,750.
ATTACHMENTS
1. Resolution
„ 2. Hangar Rate Comparison
PA
I
I „
ATTACHMENT 1
RESOLUTION APPROVING'. A RATE ADJUSTMENT TOR THE FOUR EXECUTIVE
HANGARS' AT THE PETALUMA MUNICIPAL AIRPORT
WHEREAS, the four Executive Hangars at the Petaluma Municipal Airport ("Airport")
were constructed in 2006 and at the'time of their construction, aviation and.the economy were
strong and growing; and
WHEREAS, there has 'been a decline in the economy and the airport is now, faced with
three vacant Executive Hangars; and
WHEREAS, if the three Ekec'utive Hangars remain vacant for the remainder of this
fiscal year, the loss of revenue to the Airport is estimated at $21,493; and
WHEREAS, the'loss of revenue from the three vacant Executive Hangars would require
cuts in services and repairs forilhe Airport; and
WHEREAS, the Petaluma Airport Commission reviewed hangar rates of comparable
size and amenities at Santa Rosa and Napa airports; and
WHEREAS, the Petaluma Airport Commission, at its July 7, 2011 meeting,
recommended adjusting the rates of the four Executive Hangars as follows: Hangars 18A -C
would be adjusted from $1,978 to $1,500 per month, and 18D would, be adjusted from $2,096 to
$1,600.
NOW, THEREFORE, BE IT RESOLVED that, effective November 1, 2011, the City
Council of the City of Petaluma hereby adjusts the rental rates of the Executive Hangars 18A -C
to $1,500 and 18D to $1,600. '
91
0
ATTACHMENT 2
Hangar .Rate Com" paris.on
Current Rate Adjusted
Rate
' Petaluma
$1;978
$1500
Square Feet
3,575
3,575
Construction Date
2,006
.2;006
per square foot
0.55
0.42
Santa Rosa
51,607,
$1,607
r, Square Feet
3,000
3,000
Construction Date
per square foot
0.54
0.54
Napa,
$1,148
$1148
Square, Feet
3,600i
31600
Construction Date
'1,998
1,998
per square foot
0.32
0.32