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HEARING - Airports, a division of the Chief Administrative Office, recommending the Board:
1) Approve the Final Passage (Second Reading) of Ordinance 5213, Planning and Building Department Fee Schedule;
2) Adopt and authorize the Chair to sign Resolution 188-2024 establishing an updated Airport Division Fee Schedule (Cont. 11/5/2024, Item 32);
3) Approve revisions to Board of Supervisors Policy F-10 Airports - Minimum Standards for Commercial Aeronautical Activities for El Dorado County Airports, including the revised title of "Board of Supervisors Policy F-10 County-Owned Airports - Regulations, Security, and Leases";
4) Repeal Board of Supervisors Policies F-5 Airports - Hangar Site Allocation, and F-9 Airports - Portable Hangar Color, which have been incorporated into F-10 and are no longer needed as stand-alone policies;
5) Repeal Resolution 052-2018, County Airport Advisory Committee, dissolving the Committee; and
6) Direct the Airport Director to hold at least one annual meeting with the airport users, interested parties, and the District III and IV Supervisors.
FUNDING: Federal Aviation Administration Grant funding, Caltrans Division of Aeronautics Grant Funding, Fees for Service, Lease Charges, General Fund.
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DISCUSSION / BACKGROUND
On November 5, 2024, the Board held a public hearing to discuss Airports. The Board approved Ordinance 5212 amending Title 18 of the El Dorado County Ordinance Code, Airports, to incorporate updated Airport Minimum Standards and other revisions in compliance with the Federal Aviation Administration’s current recommendations for federally obligated airports, approved the 2024 Airport Capital Improvement Program (ACIP), related budget amendment, and use of funding to pursue an appraisal and fee study for hangar and ground leases as presented by staff. Staff also presented the following goals for the Airports:
1) Achieve Self-Sufficiency for Operations. To achieve this, the County should establish market rate lease rates and adjust fees for the services already provided to a level that covers costs. Going forward, the airports will be sustainable if we can attract tenants with the desire to improve the airport in exchange for the valuable access it affords.
2) Utilize FAA and Caltrans funding to the maximum extent possible for Capital Projects. Outside of operational costs, the Airports have capital improvement needs. To use FAA and State funding to the fullest extent, the County can focus capital spending on safety needs including obstruction removal, new beacon, and pavement repair, and strategically pursue development of the East End of the Placerville Airport for eventual revenue generation.
3) Provide Value to the Community. County airports are valuable in providing an integral part of the overall transportation system. Most importantly, the Airports fill a need during wildfire or other emergency events when air operations are necessary. Airports also provide an alternative option for travel to the region, and the County could utilize existing partnerships to promote the Airports to bring activity to the surrounding local economy.
In order to allow interested members of the public to provide input to the Airport Ad Hoc Committee prior to any changes Airport fees, the Board also continued Ordinance 5213, Planning and Building Department Fee Schedule, and Resolution 188-2024, establishing an updated Airport Division Fee Schedule, to today’s meeting.
Airport Division Finances and Fee Schedule
The FAA requires Airports to be as self-sustaining as possible. The El Dorado County Airports program is funded through the Airport Enterprise Fund (Fund 5114), as well as the Special Aviation fund (1105). Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent is that the program is self-supported and financed or recovered primarily through user charges. As an industry standard, Airports should set rates for leases at market rate to provide the most revenue for operations through overall airport use. Other fees for services should be calculated to cover the cost of those services.
The gap between airport expenditures and operating revenue is approximately $800,000 for FY 2024-25. This gap is to be covered with General Fund contributions towards operations, maintenance, and lease administration. In order to support the long-term viability of the Airports, the County can pursue changes to lease rates and administration, utilization of federal funding, and adjustments to fees.
Airport rates, with a few exceptions, have not increased since 2016. In 2015, when Airports was under the Community Development Agency (CDA), CDA conducted a Fee Study (Legistar file 15-0587). The fee study documented the cost of providing services. The Board approved the fees by Resolution 079-2016. On May 21, 2019, the Board approved a correction increasing the fee for rectangular hangar ground leases from $.055 to $.082 per square foot per month, and increasing the commercial use and commercial undeveloped land lease fees from $.110 to $.164 per square foot per month, as this fee increase was inadvertently left off the 2016 resolution.
Following the restructure of the Departments within CDA, on October 22, 2019, the Board adopted Resolution 186-2019, which established the Planning and Building Department Fee Schedule and Policies and Procedures, including Airports, with no changes to fees.
In 2023, the Board adopted a $0.10/gallon fuel flowage fee, which has resulted in some additional revenue due to recent emergency response (Legistar file 23-1487).
Airport rates and charges are imposed on general and commercial aviation users of certain Airport services, other commercial business conducted on Airport property as well as the lease of Airport-controlled property. The airport fees are not considered a tax under the California Constitution, Article XIIIC, 1(e), and fall into the category in exception four: “a charge imposed for entrance to or use of local government property, or the purchase, rental, or lease of local government property.” Charges qualifying under this exception do not include the “reasonable costs limitation” found in the first three exceptions, and the local government can charge what the market will bear.
According to the U.S. City Average for All Urban Consumers Consumer Price Index from June 2016 to June 2023, costs have increased by 30.4%. The rate for California specifically was 34.2%, and the rate for the San Francisco area was 32%. Airports is proposing cost increases for most fees at 30%, based on inflationary pressures over the last eight years. It should be noted that the fees proposed for increases account for approximately 8% of the revenue at Placerville and 2% of overall operating revenue at Georgetown.
The proposed fee adjustments would not affect the fuel sales net revenue or the ground leases, but would produce an increase in revenue for hangar leases and tie-downs. With the fee adjustments, the total Increase in revenues at Placerville is estimated at $16,000/year, and $1,000/year at Georgetown. The proposed rate increases for the upcoming fiscal year will partially cover operating costs, regulatory compliance and future Airport improvements.
The exceptions to the 30% fee increase includes rates for personal and commercial ground leases, access device charges, the fuel flowage fee, and several new fees. These rates were determined based on the operational costs (labor, maintenance, escalating cost of materials for hangars, terminal facilities, runway pavement) as well as current market prices for comparable airports. Several new charges are also proposed to recover existing costs for which we currently have no fee in place.
In order to ensure that Airports is charging enough for lease rates, staff is recommending direction from the Board to engage in an appraisal and fee study for hangar and ground leases, using funding from unanticipated revenue to the airports from emergency response operations.
The Ordinance and Resolution amending the fees will take effect (30) days from execution.
New Fees
Commercial Landing Charges: The Airport is proposing a new Commercial Landing charge for non-local flights into the airports. Aircraft traffic impacts airfield pavement which requires maintenance and ongoing capital investment. These proposed rate increases will help recover maintenance costs incurred due to aging pavements and increased use of pavements. Consistent with industry standard, the Airport will not charge locally based, noncommercial aircraft landing fees given that non-commercial aircraft are charged rent to use the facility.
Gate Access Card Loss: This fee is to be charged to airport users who report a lost gate access card.
Application Fees: Currently the division charges for reassignment of ground leases upon sale of private hangars. However, there is currently no charge for new private or commercial leases or for new offsite operator access agreements, which take a substantial amount of staff time. These new fees were calculated based on the approximate number of hours staff spend to review applications, communicate with the applicant, and issue a new or revised lease. Commercial lease applications are more complex and may vary in the amount of staff time for each application, so the application fee is structured as a deposit plus time and materials charge.
Off-site Operator Daily charge: Although the FAA allows airports to enter into access agreements with off-site or independent operators, it warns that the airport should carefully apply its minimum standards through an airport access agreement, including conditions to protect the airport’s ability to meet all of its Federal obligations. The airport sponsor should have a licensing or permitting process in place that provides a level of regulation and compensation satisfactory to the airport. El Dorado County airports have few services, so specialty avionics, mechanical work, and other services are not currently available at the airport. For this reason, a new $25 daily fee is to be added to allow access for Off-Site Operators to provide specialized services, after an over-the-counter application is completed. The application fee is $60. The monthly charge will remain for off-site operators that perform work at the Airport more frequently.
Fuel Truck Surcharge: For some large aircraft, access to the stationary fuel pumps at the Placerville Airport is unsafe, difficult, or impossible. The County maintains and operates a fuel truck to dispense Jet A fuel for these customers. Use of the fuel truck requires staff time that is not needed for self-fueling at the stationary pump. A surcharge is proposed to recover costs for staff time and maintenance of the fuel truck.
Oil and Deicer: Airports maintains a small stock of deicer and oil for aircraft. A markup of the cost of these goods is proposed to recover costs for the Airport to stock and sell these goods.
Oil Disposal: The County maintains a used oil disposal site for the convenience of Airport customers and to ensure environmental compliance. This fee will defray the costs of bulk disposal of the used oil.
Airports Board Policy (F-10)
On November 12, 2024, the Board approved the final passage of Ordinance 5212, amending Title 18 of the El Dorado County Code of Ordinances, Airports, reorganizing rules and minimum standards for public use of the Airports.
The current Minimum Standards for Airports are in Board of Supervisors Policy F-10: Minimum Standards for Commercial Aeronautical Activities for El Dorado County Airports, which has not been revised since 1994. Changes to Policy F-10 to complete the organization of Airport rules and provide more details for commercial operation at the Airports. The new F-10 Policy is to be titled, “County-Owned Airports: Regulations, Security, and Leases.” The new policy removes certain sections that instead were included in Ordinance 5212, such as rules for engine runup, securing of loose items, ultralight aviation, minimum standards for commercial activity, and flying club requirements. It also incorporates all rules currently in Board Policies F-5: Airports - Hanger Site Allocation, and F-9: Airports - Portable Hangar Color in order to have all relevant policies in one document. Other than formatting changes, there are no updates to the portable hangar color rules.
Definitions from Policy F-5 along with procedures for the hangar waiting list and were carried over from the old F-5 policy, and the new version adds detail to the previous “Application for Information” and “Formal Application Process” to state that an email address and the type of requested lease. Another change is that the nonrefundable deposits apply to the application fee rather than first month rent. The requirement for Board approval for any person for an ownership interest in more than two leases was removed.
The insurance requirements were also updated pursuant to Risk Management guidance and now will include an option for blanket liability coverage in the amount of $1,000,000 to cover aircraft and vehicles entering the airport. Whereas the old Appendix A required $500,000 for general liability insurance and $300,000 auto liability, the new proposed policy requires $500,000 for these policies, or the blanket coverage.
The new version of the F-10 policy also adds a Section B, “Lease Provisions”, to provide guidelines for new hangar and ground leases, as well as for off-site operators. The application requirements section was also amended to provide details for the information required for each type of application. These sections will be implemented by Airports staff through the creation of application forms and checklists to aid in transparency and efficiency in processing.
A new section on “Security and Airport Access” incorporates the rules from an old Community Development Agency policy, and updates requirements to ensure the security and accessibility of the airport.
The Definitions section has also been updated to provide clarity for some terms, and uses FAA definitions where applicable for consistency. References to Concessionaires and Temporary Operators have been removed, since in practice these categories are not used.
Last, the proposed policy removes reference to the Airports Commission, which has not existed for years and was replaced by the Airport Advisory Committee. Resolution 052-2018 established the Committee. On July 16, 2024, based on a recommendation from the Airports Ad Hoc Committee, the Board of Supervisors paused the assembly of this Committee and directed staff to work with the Ad Hoc Committee to provide recommendations (Legistar file 24-1281). The purpose and composition of this Committee created by the current Resolution 052-2018 creates the potential for members to make recommendations to the Board for their personal benefit rather that the benefit of the airports or the County as a whole. For this reason, any resolution giving direction to an Airports committee should be revised from the current form. In addition, staff have instituted a quarterly newsletter to bring important information to Airport lessees and have successfully assembled lessees and interested members of the public, and these practices may be useful to solicit feedback as changes in the Airports Program come forward. Staff will continue to the work with the Ad Hoc Committee on Airport issues, and may bring forward a recommended resolution for adoption to establish a new advisory body on Airports, however, at this time it is recommended that the AAC be formally disbanded. In order to continue communication with Airport users and the community and to continue to receive input and feedback for the benefit of the airports, the Airport Director will hold at least one annual meeting with the airport users, interested parties, and the District III and IV Supervisors.
Airports Ad Hoc Meeting
On November 19, 2024, the Airports Ad Hoc Committee held a meeting to discuss proposed fee adjustments and a lease policy. The meeting was well attended and provided a forum for staff to explain the intent of the proposed changes to the Airport policies and fees, as well as a chance to hear ideas from pilots, airport businesses, and other users. In addition to increasing fees commensurate with inflation and adding fees for those services for which the Airport currently does not charge, several ideas for continuing to improve the Airport’s financial position were mentioned. Airport users had concerns with the introduction of a reversion clause in leases for existing, privately-owned hangars. One idea to help the Airport recover costs from private hangar sales was a transfer fee to be applied to each sale. Staff will consider these ideas and evaluate them through our forthcoming lease rate study. Many comments also conveyed concerns with enforcing application and monthly fees for off-site operators, which users rely on for specialty services. As mentioned above, the requirements for this application were minimized and the proposed fee has been reduced, however, it is important to require an agreement for access and the recommendation for this policy remains.
ALTERNATIVES
The Board may choose to provide alternative direction to staff regarding the proposed recommendations for an updated policy or fee schedule.
PRIOR BOARD ACTION
Legistar file 15-0587 (Version 5) - 05/03/2016 Approval of Resolution 079-2016 Establishing the Consolidated Fee Schedule for the El Dorado County Community Development Agency, Adopting Fees for Agency Services as revised, and Adopting Community Development Agency Fee Policies and Procedures as revised, with consideration of the Board’s prior comments, including incorporation of the Airport fees at the full cost recovery rate.
Legistar file 18-0526 - April 10, 2018 - The Board adopted Resolution 052-2018 which served to combine the Placerville Airport and Georgetown Airport Advisory Committees and further directed the newly-formed County Airport Advisory Committee to develop bylaws.
Legistar file 18-1721 - November 13, 2018 - The Board approved and adopted the Airport Advisory Committee Bylaws.
Legistar file 19-0749 - 05/21/2019 - Adopted Resolution 080-2019 that corrected mistakes on the previous fee resolution by increasing the fee for rectangular hangar ground leases from $.055 to $.082 per square foot per month, and increasing the commercial use and commercial undeveloped land lease fees from $.110 to $.164 per square foot per month. Minor changes were also made to clarify Tie Down rates.
Legistar file 19-0663 - October 22, 2019 - Adopted Resolution 183-2019 replacing 080-2019 with no changes to the fees.
Legistar file 23-1487 - August 15, 2023 - The Board received the Planning and Building Department Final Fee Study Report. Staff recommended increases to Airport fees that would result in full cost recovery. The Board provided direction to add $0.10/gallon Fuel Flowage fee during emergencies and a new fee for Commercial landing, and to table remaining increases until the completion of the Economic Development Study, with no other changes to the fees.
Legistar file 23-1672 - October 24, 2023 - The Board adopted Ordinance 5185 which superseded Resolution 183-2019 and included Exhibit B - Airports Division Fee Schedule which added an hourly rate of $171 and the $0.10 fuel flowage fee and removed the Airports Division Additional Fees which were moved to Exhibit A - Planning and Building Department Policies and Procedures.
Legistar file 23-2157 - January 23, 2024 - The Board approved the reassignment of the Airports program to the Chief Administrative Office, effective July 1, 2024.
Legistar file 24-1090 - June 25, 2024 - The Board appointed an Ad Hoc Committee on Airports, composed of Supervisors Thomas (District III) and Parlin (District IV)
Legistar file 24-1281 - July 16, 2024 - The Board paused the assembly and responsibilities of the Airports Advisory Committee (AAC) and directed the Chief Administrative Office to work with the Ad Hoc committee to provide a report to the Board on the role and structure of the AAC, and to provide recommendations.
OTHER DEPARTMENT / AGENCY INVOLVEMENT
Chief Administrative Office, Community Development Finance and Administration
County Counsel
Federal Aviation Administration
CAO RECOMMENDATION / COMMENTS
Approve as recommended.
FINANCIAL IMPACT
The proposed rates are based on previous fee studies, updated to account for inflationary pressures. The total existing gap between airport expenditures and operating revenue over the previous years is $630,000 each year, with a $800,000 gap as budgeted for FY 2024-25. With the fee adjustments, the total increase in is estimated at $33,000 each year.
CLERK OF THE BOARD FOLLOW UP ACTIONS
1) Obtain the Chair’s signature on the original Ordinance 5213.
2) Publish a summary of Ordinance 5213 pursuant to Government Code Section 25124(b)(1).
4) Obtain the Chair's signature on Resolution 188-2024 and forward one copy to the Chief Administrative Office, Attention: Jennifer Franich.
5) Post Policy F-10 to the Board of Supervisors Policy Manual webpage.
6) Remove Policies F-5 and F-9 from the Board of Supervisors Policy Manual webpage.
STRATEGIC PLAN COMPONENT
N/A
CONTACT
Jennifer Franich, Deputy Chief Administrative Officer/Airports Director