REPORT TO THE CITY COUNCIL
June 9, 2016
FROM: KEVIN R. MEIKLE, Director of Aviation
Airports Department
SUBJECT
Title
***RESOLUTION - 526th amendment to the Master Fee Schedule (MFS) Resolution No. 80-420 to adjust rates and charges at Fresno Yosemite International Airport.
Body
RECOMMENDATION
Staff recommends Council approve Resolution 80-420 adopting the 526th Amendment to the Master Fee Schedule to incrementally increase the Signatory Landing Fee Rate (LFR), the Non-Signatory LFR, and the Terminal Rental Rate over a five year period, and to decrease the Federal Inspection Station (FIS) User Fee at Fresno Yosemite International Airport (FAT).
EXECUTIVE SUMMARY
The proposed five-year airline rate structure supports the Airports goal and ability to meet its ongoing facilities capital program, operations and maintenance costs, long term capital needs, and to ensure future investment grade bond ratings. The airlines support the five-year rate plan because they want to ensure that, (i) FAT continues to be a viable enterprise that is safe, efficient, secure and meets their needs without the financial burden of deferred maintenance, and, (ii) FAT's ability to fund necessary long term future capital needs is financially attainable.
The five-year incremental adjustment satisfies the airlines desire to smooth out the rate plan over time as compared to a one-time adjustment. The proposed rate plan does not obligate the City beyond its current obligation to provide, maintain and grow FAT facilities in a proactive and responsible manner.
The rates that airlines pay an airport represent a small percentage of their overall operating costs. For this reason, airport rates and charges are not a factor in an airline airfare setting model (fares are market and competition driven). In addition, the airlines recognize that FAT's rates and charges are very low by industry standards, and the new rate plan continues to keep FAT's rates well below those standards.
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