TITLE
Consider a memorandum/resolution to approve a customer facility charge at Killeen Fort Hood Regional Airport.
SUMMARY
DATE: October 23, 2018
TO: Ronald L. Olson, City Manager
FROM: Matthew Van Valkenburgh A.A.E., Executive Director of Aviation
SUBJECT: APPROVAL OF A RESOLUTION FOR THE CUSTOMER FACILITY CHARGE AT KILLEEN FORT HOOD REGIONAL AIRPORT
BACKGROUND AND FINDINGS:
The customer facility charge (CFC) is a user fee imposed by an airport operator on each rental car user, collected by rental car companies. In general, a CFC is collected for each rental car transaction or each rental car transaction day. These revenues are generally used for capital, operating and maintenance, and financing costs of rental-car-related projects, such as rental car quick-turn facilities (QTF), terminal roadway and curbside improvement, and utility infrastructure systems. Also, if the Airport needs to use part of an existing parking facility for rental car operations, CFC may be used to build replacement parking space elsewhere. The CFC rate is typically adjusted from time to time to provide adequate revenues for all obligations; therefore, the CFC rate is determined locally.
When the commercial aviation service moved from the former Killeen Municipal Airport to the Killeen Fort Hood Regional Airport in 2004, a Capital Improvement Recovery Fee was established to assist the new Airport in funding its operations and development. This rate was established at $2.00 per transaction day. In 2011, a new agreement was negotiated with the rental cars which continued the collection of this fee, now renamed as a CFC, with the purpose to further develop rental car facilities and operations; the rate continued at the $2.00 level. These funds are being used to upgrade the rental car quick-turn facility car wash and cleaning equipment with the addition of a new automated bay and new equipment for the remaining bays. Additionally, these funds will be used to provide a covered parking area for the rental car “ready” lot.
In 2018, the rental car agreement is being rebid due to the expiration of the existing agreements. This resolution is to provide for the continuation of the CFC to fund the operations and maintenance of the upgraded facilities, provide for infrastructure and roadway improvements for the facility, and to provide funding for a major upgrade to the rental car area. This upgrade will relocate the unleaded fueling facility from its current location to the QTF area, expand the existing ready lot, relocate the car wash and cleaning facilities, and provide additional storage area for vehicles. Due to the undertaking of this major project, staff has proposed an increase in the CFC to $3.00 per transaction day. This project corresponds to requested facility upgrades from the rental car partners.
THE ALTERNATIVES CONSIDERED:
Alternatives considered: (1) approve resolution, or (2) do not approve the resolution.
Which alternative is recommended? Why?
Staff recommends alternative 1. Approval of the resolution will provide for a continuation of a program which is currently in operation, provide for funding to further improve the facilities at the rental car area, provide for roadway infrastructure improvements supporting the rental car area, and provide operations and maintenance costs for the operation of the facilities
CONFORMITY TO CITY POLICY:
Yes
FINANCIAL IMPACT:
There is no financial impact for this resolution. Revenue projections will be included in the staff report for the rental car agreements.
What is the amount of the expenditure in the current fiscal year? For future years?
N/A
Is this a one-time or recurring expenditure?
N/A
Is this expenditure budgeted?
N/A
If not, where will the money come from?
N/A
Is there a sufficient amount in the budgeted line-item for this expenditure?
N/A
RECOMMENDATION:
Council approve the resolution and authorize the City Manager or designee to execute same.
DEPARTMENTAL CLEARANCES:
Finance
Legal
ATTACHED SUPPORTING DOCUMENTS:
Resolution