Charles M. Schulz – Sonoma County Airport Status Report ...

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

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~ Twitter