COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Public Works

DATE:

May 3, 2004

BOARD MEETING DATE:

June 8, 2004

TO:

Honorable Board of Supervisors

FROM:

Neil R. Cullen, Director of Public Works

SUBJECT:

Fees Schedules for San Carlos and Half Moon Bay Airports

Recommendation

Adopt a resolution adjusting the schedule of fees for the use of facilities at the San Carlos and Half Moon Bay Airports effective July 1, 2004, including an annual automatic rate adjustment for three (3) successive years beginning on July 1, 2005, based on the Consumer Price Index (CPI), for all hangar, tiedown, transient and right-of-entry fees.

Previous Board Action

Adopted Resolution No. 63977 in 2000, that established hangar and tiedown fees for San Mateo County Airports and the use of the CPI to adjust the fees for a three-year period (2001-2004).

Key Facts

The fee schedule authorized by Resolution No. 63977 will expire on June 30, 2004.

Discussion

Airport Fees

The current fee schedule was based on fees established by your Board in 2000, and adjusted annually for the past three (3) years using the Bay Area CPI as provided by the Resolution adopted by your Board.

We are recommending some fee adjustments but essentially no overall increase in fees this fiscal year as the fees at San Carlos and Half Moon Bay Airports are currently some of the highest for general aviation airports in the Bay Area (see attached hangar and tiedown rental rate survey).

The following are specific recommendations for the various fees over the next four (4) years:

Tiedowns, Right-of-Entry and Transient Fees: We recommend a three-year automatic annual rate adjustment for all tiedown, right-of-entry and transient parking fees based on the Bay Area CPI beginning July 1, 2005. The total number of aircraft tiedown accounts at San Carlos and Half Moon Bay Airports have declined by approximately two percent (2%) over each of the past two (2) years due to the poor economy, as individuals have moved out of the area or relocated their aircraft to airports with less expensive fees. We believe not changing the fees until July 1, 2005, will avoid a further decline in airport tiedown accounts.

Hangars Generally: We recommend a three-year automatic annual rate adjustment for all hangar fees based on the Bay Area CPI beginning July 1, 2005. Additionally, we are recommending the hangar square footage rates be standardized and adjusted as indicated below effective July 1, 2004, to uniformly reflect the condition, desirability and demand for particular types of hangars at each airport. There is currently little or no waiting for a standard hangar at Half Moon Bay Airport and several of the older and less desirable Port-a-Port hangars at Half Moon Bay are sitting vacant. The County's hangar rates for standard steel hangars are the highest of general aviation airports in the Bay Area (see attached hangar rental rate survey).

San Carlos Airport Hangars:

1.

Older Wood Construction Hangars - standardize rate to $0.34 per square foot (existing square footage rates for similar hangars vary from $0.3345 to $0.3373 per square foot).

2.

Steel Construction Hangars - standardize rate to $0.42 per square foot (existing square footage rates for similar hangars vary from $0.4023 to $0.4218 per square foot).

3.

Steel Construction Hangars with Power Doors - adjust rate to $0.52 per square foot (existing square footage rate is $0.5147 per square foot).

Half Moon Bay Airport Hangars:

1.

Older Port-a-Port Hangars - reduce rate to $0.30 per square foot from the existing square footage rate of $0.3373 to increase the marketability of the vacant Port-a-Port hangars.

2.

Steel Construction Hangars - reduce rate to $0.38 per square foot (existing square footage rate is $0.3899 per square foot).

Overall hangar rate increases are offset by net decreases in the recommended hangar rate adjustments proposed for July 1, 2004, and would result in no net gain or loss to airport revenues.

Storage Area Fees: Twenty-five (25) storage areas are rented to airport tenants. Storage areas vary in size but are not large enough for the storage of a complete aircraft. We are proposing an annual increase of $0.10 per square foot for storage areas beginning July 1, 2004. Fees will continue to increase annually until they are comparable with the cost of local public storage areas. This increase would provide approximately an additional $6,000 in new revenues annually.

Security Fees: Currently a flat fee of $16 per month is charged for every right-of-entry or aircraft storage agreement at San Carlos Airport and is used to offset the cost of airport security services. We are not recommending an increase as the $16 fee is currently adequate to cover the costs of security services. However, we recommend that the security fee be reviewed and adjusted annually beginning July 1, 2005, to reflect and increase in actual costs related to security services provided at the airport.

Fuel Flowage Fees: Fuel flowage fees are paid by fuel vendors for the right to sell fuel at County Airports, and these fees are then passed on to purchasers. Currently, fuel flowage fees are $0.10 per gallon for either jet or 100 low lead aviation fuel. Our flowage fees are at the high end of the industry rate spectrum and we are recommending no change to the existing fees.

Vision Alignment

We believe our recommendation is consistent with the Shared Vision Commitment to be a "responsive, effective and collaborative government," and Goal Number 20, "government decisions are based on careful consideration of future impact, rather that temporary relief or immediate gain," as appropriate fee schedules will allow the County airports to continue to be economically self-sufficient as required by the Federal Aviation Administration.

Fiscal Impact

The estimated increase in revenue to the Airport Fund from the rate adjustments recommended for July 1, 2004, are estimated at an additional $6,000 per year. Increases or decreases for the three-year annual automatic CPI adjustments for hangar, tiedown, right-of-entry and transient fees would depend on the change to the Bay Area CPI during those subsequent years. There is no impact to the General Fund.

A form of resolution has been approved by County Counsel.

We have notified the tenants and airport businesses of the proposed fee increases and the date when your Board will be considering our recommendation.