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HomeMy WebLinkAbout~Master - Revisions to Airport's Fixed Base Operator Contract RESOLUTION NO. 13-270 RESOLUTION APPROVING PROPOSED REVISIONS TO THE MUNICIPAL AIRPORT'S FIXED BASE OPERATOR CONTRACT FOR THE CITY OF AMES,IOWA WHEREAS,on March 27,2012,the City Council approved a one-year extension to the Fixed Base Operator(FBO) lease with Hap's Air Service,the current FBO, and that lease extension will expire on June 30, 2013; and, WHEREAS,typically,the City would proceed to solicit proposals from prospective FBO's to determine the best firm to perform critical services at our airport and to establish a specific expiration date for the contract, however, the first change that is being proposed involves an addendum to the existing contract to extend the current FBO lease until such time that the new Ames Airport Terminal is constructed,which is planned in the 2015/16 year of the Capital Improvement Plan(CIP); and, WHEREAS, in the case of unforeseen circumstances, the addendum will also provide an option for 30 days written notice of contract termination; and, WHEREAS, given the current vision for the future of the Ames Airport as a gateway to the community, it will be in the City's best interest for the creation of a new FBO lease contract to coincide with the construction of those identified airport improvements, and these improvements, such as a new Terminal Building and Runway Extension, will call for additional and enhanced services that will need to be included in the Minimum Operating Standards of a new FBO lease—one that will reflect the new and growing status of the Ames Airport; and, WHEREAS,staff has met with the president of Hap's Air Service to discuss the terms of the proposed extension, and she has agreed to the change that modifies the expiration of the lease to be an event(the construction of the new terminal building)rather than a fixed date; and, WHEREAS, in discussion with Hap's Air Service, it expressed its desire to reinvest in its business in order to stay current with the growing needs of the Airport,and as part of this discussion focused on the impact that past and current infrastructure projects,including the recent West Apron Rehabilitation project, has had and is having on its revenues -mainly due to lost fuel sales; and, WHEREAS, therefore, as part of the lease extension, Hap's Air Service is requesting a second change to the contract for a 50%reduction in their lease payments (excluding fuel flowage fees) for the months of July, August, and September while the West Apron Rehabilitation project is under construction to help mitigate these losses; and, WHEREAS, currently, Hap's Air Service pays $29,000 per year for the FBO lease and $12,000 per year to lease the T-hangars,which equates to approximately$3,416.67 per month, and 50%reduction over the first 3 months of FY 2013/14 will equate to a total impact of$5,125; and, WHEREAS, it should be noted that, after the completion of the West Apron Rehabilitation project,there are no planned surface improvements that could potentially affect revenues of the FBO until the extension of Runway 01/19, and in addition,it is estimated that,over the next five years of the current CIP,only$30,000 will be needed from the Airport Construction Fund for the Master Plan update; and, WHEREAS,equally significant is the fact that after the construction of the terminal building, which is anticipated to have an attached hangar, there will be several new revenue opportunities associated with the new terminal building that will potentially offset impacts to the FBO from future improvement projects; and, WHEREAS,typically,Airport revenues from leases,farming,flowage fees,and other sources far exceed yearly operational costs,and given the current airport budget,there should be little impact seen from reducing the FBO contract in the amount of$5,125. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ames, Iowa, that directing the City Attorney to draft an addendum to the FBO Lease with Hap's Air Service: 1) to extend the contract to such time that the new Ames Terminal Building is constructed or upon 30 days written notice of a newly established termination date,and 2)to include a 50%reduction in the FBO lease for the months of July,August,and September 2013,totaling$5,125,is hereby approved. ADOPTED THIS 11 th day of June, 2013. A- Diane R. Voss, City Clerk Ann H. Campbell, Mayor Introduced by: Davis Seconded by: Szopinski Voting aye: Davis, Goodman, Larson, Orazem, Szopinski Voting nay: None Absent: Wacha Resolution declared adopted and signed by the Mayor this I Itn day of June, 2013.