The URL can be used to link to this page

Home My WebLink AboutResolution No. 2018-43Sponsored by: Administration CITY OF KENAI RESOLUTION NO. 2018 • 43 A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI , ALASKA, APPROVING A SECOND AMENDMENT TO THE AIRLINE OPERATING AGREEMENT AND TERMINAL AREA LEASE AND AUTHORIZING THE CITY TO ENTER INTO SUCH AGREEMENT WITH CORVUS AIRLINES D/B/A RAVN ALASKA. WHEREAS , the City of Kenai is the owner and operator of the Kenai Municipal Airport; and, WHEREAS, the Administration working with an airline consultant has developed an amendment to the current airline operating agreement and terminal area lease; and, WHEREAS , the airline operating agreement and terminal area lease has modernized the terminal leasing procedures and policies; and, WHEREAS, the Administration consulted with the two regularly scheduled passenger airlines currently operating at the Kenai Municipal Airport regarding the agreement; and, WHEREAS , non-signatory airlines operating out of the passenger terminal building will pay an additional 30% than signatory airlines; and, WHEREAS, it is in the best interest of the City of Kenai to authorize the City Manager to enter into such agreement with Corvus Airlines, d/b/a RAVN Alaska, on behalf of the City. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA: Section 1. That the Kenai City Council approves the Second Amendment to the Airline Operating Agreement and Terminal Area Lease form as shown in Exhibit 1; and, Section 2. That the Kenai City Manager is authorized to enter into such an agreement with Corvus Airlines, d/b/a/ RA VN Alaska . Section 3. That this resolution takes effect immediately upon adoption . ADOPTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 151 day of August, 2018 . ATTEST: MEMORANDUM TO: Mayor Brian Gabriel and Kenai City Council THROUGH: Paul Ostrander, City Manager FROM: Mary L. Bondurant – Airport Manager DATE: July 19, 2018 SUBJECT: Resolution 2018-43- Approving Second Amendment to the Airline Operating Agreement and Terminal Area Lease for Corvus Airlines Attached to this memo is the Second Amendment to the Kenai Municipal Airport Airline Operating Agreement & Terminal Area Lease signed by Corvus Airlines, d/b/a RAVN Alaska, for City Council approval and Administration execution. The original agreement was from 2008 to 2013 and the First Amendment from June 2013 expired on June 30, 2018. During the past months, City and Airport Administration, along with Steve Horton of Leibowitz & Horton, evaluated financial costs associated with Airport operations. The Finance Director and Airport Manager presented the evaluation with a recommendation of a 5% increase to Council during the May 24, 2018 budget work session. Due to the future terminal rehabilitation project involving changes to the airline’s exclusive and joint use areas, this amendment is for only one year. After project completion, a new agreement will be negotiated based on the final allocation of the airline areas. I recommend approval of this Second amendment to the Airline Operating Agreement and Terminal Area Lease. Thank you for your consideration. Attachment SECOND AMENDMENT TO THE KENAI MUNICIPAL AIRPORT AIRLINE OPERATING AGREEMENT AND TERMINAL AREA LEASE THIS SECOND AMENDMENT to the Kenai Municipal Airport Airline Operating Agreement and Terminal Area Lease (the "Second Amendment") is made and entered into this 1st day of July, 2018, by and between • e City o .Ke?ai, AlasJ.<a e "CA~)")., a political subdivision of the State of Alaska, an · ~-~-: r dbl "()~~the "Airline"), a corporation organized and existing under the laws of the State of_ t\\ {\t( O and authorized to do business in the State of Alaska. RECITALS The circumstances surrounding the making of this Second Amendment are as follows : A. City and Airline are parties to the Airline Operating Agreement and Terminal Area Lease dated June 1, 2008, as amended by the First Amendment dated June l, 2013 (hereinafter referred to as the "Agreement"), under which Airline operates an Air Transportation business and leases property at the Kenai Municipal Airport. B. Pursuam to Section 12.20 of the Agreement, the Agreement may be amended in whole or in part without further consideration upon mutual written consent of City and Airline who both herein wish to amend the Agreement. C . Pursuant to Section 2.1 of the Agreement, the term began on June 1, 2013 and continued for a consecutive sixty (60) month period thereafter. D. Pursuant to Section 5 .2 of the Agreement, the Landing Fee charges shall be based on the rate and amount then currently approved by the City as provided in Exhibit C. E. Pursuant to Section 5 .3 of the Agreement, rentals for the Airline's Exclusive Use Space and Joint Use Space shall be based on the rate and amount then currently approved by the City as provided in Exhibit C. F. Pursuant to Section 5.4 of the Agreement, the Terminal Apron Aircraft Parking and GSE Space rentals shall be based on the rate and amount then currently approved by the City as provided in Exhibit C. Second Amendment -Airline Operating Agreement and Tenninal Area Lease Pagel of 5 LESSOR ~ LESSEE ~ AMENDMENTS 1. Section 2.1 of the Agreement is amended to read in its entirety as follows· The tenn of this Agreement (the "Term") shall begin on July 1, 2018 ("Commencement Date") and shall terminate in twelve (12) consecutive months thereafter (except as it may be terminated or extended in accordance with this Agreement), and the rentals, fees, and charges shall be effective on the Commencement Date, but only in the event that the Premises are then tendered to Airline ready for use and occupancy in accordance with the terms and provisions of this Agreement. 2. Any reference to Exhibits A and B in the Agreement or this Second Amendment shall mean the Exhibits A and B which are attached to this Second Amendment and incorporated herein by reference. 3. Any reference to Exhibit C, "Calculation of Terminal Rent, Apron Space Rent and Landing Fees" in the Agreement or this Second Amendment shall mean the Exhibit C which is attached to this Second Amendment and incorporated herein by reference, including all notes to that Exhibit C. 4. Section 5.2.1 of the Agreement is amended to read in its entirety as follows: Airline shall pay to the City within thirty (3 0) days follO\ving the end of each month, without demand or invoicing, landing fee charges for aircraft landings for the preceding month at the rate and in the amount then currently approved by the City as provided in Exhibit C -Airline Rate Schedule. 5. Section 5.3. l of the Agreement is amended to read in its entirety as follows: Airline shall pay to the City in advance, on the first day of each month, w ithout demand or invoicing, rentals for Airline's Exclusive Use Space and Joint Use Space at the rate and in the amount then currently approved by the City as provided in Exhibit C -Airline Rate Schedule. Second Amendment -Airline Operating Agreement and Tenninal Area Lease Page2 of 5 LESSOR~ LESSEE ~ 6. Section 5.4 of the Agreement is amended to read in its entirety as follows : Airline shall pay to the City in advance, on the first day of each month, without demand or invoicing, rentals for Airline's use of the terminal apron space for the parking of aircraft and the storage of ground service equipment (GSE) at the rate and in the amount then currently approved by the City as provided in Exh ibit C -Airline Rate Schedule. 7. Section 4.1.3 of the Agreement is amended to read in its entirety as follows: Airline hereby leases the terminal apron space for the parking of aircraft and the st orage of ground service equipment (GSE) being more particularly delineated on Exhibit E, as the same may be amended from time-to-time. 8. The terms of the Agreement shall continue in full force and effect except as modified by this Second Amendment. Second Amendment -Airline Operating Agreement and Tenninal Area Lease Page 3 of 5 LESSOR 70 LESSEE ~ IN WITNESS WHEREOF, the parties hereto have hereunto set thei r hands, the day and year stated in the individual acknowledgments below. LESSOR: CITY OF KENAI By: Paul Ostrander -City Manager I Cr--o Name -Tit e ~~~....:_~~~~~- (If Lessee is a Corporation) ATTEST: Name and Title STATE OF ALASKA ) )ss THIRD JUDICIAL DISTRICT ) THISISTOCERTIFYthatonthis ~ dayof ~ 2018, \J .$r~,,[~ (name), C';'fD (title) of Co rv~v\\V\.IV,) , being personally known to me or having produced satisfactory evidence of identification, appeared before me and acknowledged the voluntary and authorized execution of the foregoing instrument on behalf of said Corporation. · •"''""'"'''''" . ,,~~NE Ho~,,,,, /f;;;;~:-!fj\\ 11i~ i 5 I -·-J. j Notary Public for Alaska \ ~ ~ A(l8L\G ~ J My Commission expires: \~~.il tt.OF ,.\J:.~ ~~ l ~ '91. ..... _.... ·~" •* ~ 01) ~ ""'~ • .,,,,, <:..q>jreS rY •''' Second Amendment -Airline "Pemting"'"~ Agreement and Tenninal Area Lease Page 4 of 5 LESSOR 70 LESSEE ~ STATE OF ALASKA ) )ss THIRD JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this __ day of 2018, PAUL OSTRANDER, City Manager of the City of Kenai, Alaska, being personally known to me or having produced satisfactory evidence of identification, appeared before me and acknowledged the voluntary and authorized execution of the foregoing instrument on behalf of said City. Notary Public for Alaska My Commission expires: ____ _ Approved by Kenai City Council ------------ Approved as to lease form by City Attorney -~- Approved by Finance Director 1 g Approved by City Manager __ _ Return to: City Attorney 210 Fidalgo Ave. Kenai, AK 99611 Second Amendment -Airline Operating Agreement and Terminal Area Lease Page 5 of 5 LESSOR T~ LESSEE ~ - 10 11 -------..... -- ,------, ----------0 0 0 D Q 0 Q r L _J ~-~J. -=---,----C ~ .,,,.,,.-----........ ' I ----___, -.._,,/' / ........... ', • • 11 ___.,,,. .........__ '-------it,_ --------- I / THIS DRAWING IS NOT TO SCALE LESSOR ~~~~~~~~~~~~ LESSEE ~~~~~~~~~~~~~ WINCE-CORTHELL-BRYSON Jal NO: I R0118ED : 5-21-11 KENAI MUNICIPAL AIRPORT EXHIBIT A EXCLUSIVE SPACE KENAI, ALASKA "" fl I I I I I L_ ...._ ----- 10 LOUNGE 8 ~,_ ~ ~~ 1L_ ---....._ ,~I --------I 'C - ~--·---- 42 Baggage Breakdov<ll art:a 960 S .F " " c a ,l 40 Ba9gage Makeu p Are a 2.400S.F ~--, I . ....... .......__ ____ _ WINCE -CORTHELL-BRYSON JO B ~O: 2007.040 I RJ;\1SS) T,W '/<' IMPROVEMEN'lS '-. I _:_: ----~ --=-= -=-. {l_ I / THIS DRAWING IS NOT TO SCALE LESSOR ----------- LESS EE --------------- KENAI MUNICIPAL A IRPORT EXHIBIT B JOINT USE SPACE KENAI , ALASKA ENA_ExhC_201B-19_02.123 EXHIBIT C AIRLINE RATE SCHEDULE KENAI MUNICIPAL AIRPORT City of Kenai, Alaska 17-May-18 Calculation of Terminal Rent, Apron Space Rent and Landing Fees RAVN Alaska Area D escription pace: Exclusive use s Room#s 28 ,29,30,31 ake-up area Joint use space Baggagem Baggage br Baggage cla Passengerh departure ha eakdown area im area o ldroom arrival and llways Total Terminal Rent Leased/ (1) Used Base Space Rental Rate (sq ft) (psfpy) (a) (b) 1 ,152 $33.85 2,400 $20.51 960 $20.51 1,200 $33.85 1,824 $33.85 7,536 I 2018/19 Terminal Rent -· Allocated (2) I Prior Year Preliminary Joint Rent J Enplanement Joint Rental Subsidy Rental I Percentage Amount Reduction Amount (c) (a)x(b)x(c) 20% ---$38,998 Enplaned Pax 68.444 76.2% $37,484 ($7,497 $29,987 76.2% $14,994 ($2,999 $11,995 76.2% $30,939 ($6,188 $24,751 j 76.2% $47 027 ($9 405 $37,622 I $143,352 2018/19 Terminal Aoron/GSE Soace Rent Terminal Apron Aircraft Parking & GSE Space Rent Lan ding Fees VN Alaska -Total Rent and Fees NOTES: Space Used <so ft) 31 .755 ~3) Projected Landed Wgt (1 ,000#s) 127,493 (1) Rental Rate (osfov\ $0.52 2018/19 Landing Fees (1) Landing Fee Rate $1 .70 (1) Rental rates and fees are scheduled to increase by 5% for each year of the agreement. (2) The Joint Rent Subsidy percentage applies a rental amount reduction provided by the Airport. (3) Aircraft landed weights are estimated -actual landing fees are to be based on actual weight. 2nd Amendment -Airline Operating Agreement and Terminal Area Lease Page 1of2 Apron Space Rent $16,4851 Landing Fees $216,117 ;!375,9~ LESSOR -r LESSEE ~ ENA_ExhC_2018-19_02.123 EXHIBIT C AIRLINE RATE SCHEDULE KENAI MUNICIPAL A IRPORT City of Kenai, Alaska 17-May-18 Calculation of Terminal Rent, Ap ron Space Rent and Landing Fees Grant Aviation 2018119 Terminal ~ent Leased/ (1) Allocated (2) Used Base Prior Year Preliminary Joint Rent Area Space Rental Rate Enplanement Joint Rental Subsidy Rental Description (sq ft) (psfpy) Percentage Amount Reduction I Amount (a) (b) (c) (a)x(b)x(c) 20% Exclusive u se space. Room #s 34,35 ,36A,368,37 1,026 $33.85 ---$34,732 Enplaned Pax Joint use space: 2 1,422 Baggage make-up area 2 ,400 $20.51 23.8% $11 ,732 ($2,346 $9,385 Baggage breakdown area 960 $20.51 23.8% $4,693 ($939 $3,754 Baggage claim area 1,200 $33.85 Passenger holdroom, arri val and 23.8% $9,683 ($1,937] $7,747 1 departure hallways 1,824 ·----·~33 .85 23.8% $14 ,719 ($2,944 $11,775 Total Terminal Rent L . 7,4!0 1 $67,394 2018/19 Terminal Aoron/GSE Space Rent (1) Space Used Rental Rate (SQ ff)_ {este~} Terminal Apron Aircraft Parking & GSE Space Rent I 10,730 $0.52 2018/19 Landing Fees (3) (1) Projected Landing Landed Wgt Fee (1 ,000#s} Rate L anding Fees 34,158 $1 .70 Grant Aviatipn -Total Rent_ and Fees NOTES: (1) Rental rates and fees are scheduled to increase by 5% for each year of the agreement. (2) The Joint Rent Subsidy percentage applies a rental amount reduction provided by the Airport. (3) Aircraft landed weights are estimated -actual landing fees are to be based on actual weight. 2nd Amendment -Airline Operating Agreement and Terminal Area Lease Page 2 of2 Apron Space Rent $5,570 Landing Fees $57,901 $13o_,a $il LESSOR LESSEE EXHIBITD AIRLINE AND AFFILIATE INSURANCE REQ UIREMENTS A . Airline Liability Insurance and Comprehensive General Liability Insurance Insurance limits of liability for Airline and each of its individual Affiliates shall be detennined by the capacity in passenger seats of the largest aircraft in Airline's and its Affiliate's fleet as follows: I. Not less than one hundred fifty million dollars ($150,000,000) per occurrence for airlines operating aircraft of one hundred ( 100) seats or more; 2. Not less than one hundred million dollars ($100,000,000) per occurrence for airlines operating aircraft of between sixty (60) and ninety-nine (99) seats; 3. Kot less than fifty million dollars ($50,000,000) per occurrence for airlines operating aircraft of bet\veen twenty (20) and fifty-nine (59) seats; 4. Not less than twenty million dollars ($20,000,000) per occurrence for airlines operating aircraft of nineteen (19) or fewer seats; 5. Not less than five million dollars ($5,000,000) per occurrence for airlines operating aircraft of nine (9) or fewer seats; 6. Passenger personal injury not less than twenty-five million dollars ($25 ,000,000) per occurrence and in the annual aggregate with respect to non-passenger personal injury. B. Hangar Keepers Liability Insurance (If Applicable) Hangar keepers liability insurance in an amount adequate to cover any non-owned property in the care, custody and control of Airline or any of its individual Affiliates on the Airport, but in any event in an amount not less than five million dollars ($5 ,000,000). C. Automobile Liability Insurance Automobile liability insurance in an amount adequate to cover automobile insurance while on Airport premises in an amount not less than one million dollars ($1,000,000) per person per occurrence. D . Workers' Compensation and Employers' Liability Insurance Statutory coverage and liability limits are required. Airline Operating Agreement L?~ and Tenninal Area Lease LESSEE ~ ---- ..... ~ .. ,,..-bJ GRANT 10,730 S .F. - PASSENGER ~ SAFETY ~ ZONE ~ 11 II l --- RAVN 31 ,755 S.F. ----- JC::.c.:iic=-c=o~ ...... ~~C:.&::;:.i;:::::.~c:a. B D G il - LESSOR-------------- LESSEE --------- KENAI MUNICIPAL AIRPORT - EXHIBIT E APRON AIRCRAFT PARKING KENAI, ALASKA