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-BOARD OF TRUSTEES PRESIDENT/CEO Nat Carasali, Chair Marily M. Mora, A.A.E. *** Andy Wirth, Vice Chair EXECUTIVE VICE PRESIDENT/COO ** Rick Murdock, Secretary Dean E. Schultz, A.A.E. * Dr. Kosta Arger, Treasurer GENERAL COUNSEL Bill Eck Ann Morgan, Fennemore Craig Jones Vargas Jerry Hall CLERK OF THE BOARD *** Steve Katzmann Claire Johnson

**** Bob Larkin **** Adam Mayberry * Chair of Finance and Business Development Committee ** Vice Chair of Finance & Business Development Committee *** Member of Finance and Business Development Committee **** Alternate on Finance and Business Development Committee

AGENDA RENO-TAHOE AIRPORT AUTHORITY

FINANCE & BUSINESS DEVELOPMENT COMMITTEE MEETING

DATE & TIME: Tuesday, September 9, 2014 9:00 a.m. LOCATION: Reno-Tahoe International Airport Administrative Offices, Conference Rooms A-B Reno, Nevada AGENDA

I. Approval of meeting minutes from August 12, 2014

II. Public Comment (limited to 3 minutes)

III. Items to be presented to the Finance and Business Development Committee for review and recommendation to the Board:

A. Authorization for the President/CEO to Execute a Professional Services Agreement with Brock Solutions for the Upgrade and Replacement of Hardware and Software, and the Configuration Services Required to Upgrade the In-Line Baggage Handling System Controls Owned and Operated by the Reno-Tahoe Airport Authority, Exempt from Competitive Bidding Pursuant to NRS 332.115, in an Amount not to Exceed $210,975

B. Authorization for the President/CEO to Negotiate Final Terms and Execute a

New 5-Year, 3-Month Non-Commercial Hangar Lease Agreement with One, 5-Year Option to Extend Between Challenger Consulting, LLC and the Reno-Tahoe Airport Authority for Box Hangar 10 Located at General Aviation West at the Reno-Tahoe International Airport

C. Authorization for the President/CEO to Release Seven T-Hangars (W27-W33)

Located at General Aviation West at the Reno-Tahoe International Airport and to Execute Contracts to both Rehabilitate and Repair Required Pavement and T-Hangars

**REVISED**

Reno-Tahoe Airport Authority August 12, 2014 Finance & Business Development Committee

D. Approval of Passenger Facility Charge (PFC) Application 14-12-C-00-RNO in the Amount of $34,012,390 to Construct/Acquire Various Capital Assets for the Reno-Tahoe International Airport

IV. Items presented to the Finance & Business Development Committee for approval:

A. None.

V. Items presented to the Finance & Business Development Committee for discussion: A. None.

VI. Items presented to the Finance & Business Development Committee for

information: A. Consumer Price Index Utilization for Annual T-Hangar Rent Rate Adjustments

at the Reno-Tahoe International Airport and Reno-Stead Airport B. Review of Operating Results through July 2014 C. Review of Budget Transfers (if any) D. Review of Contracts and Professional Service Agreements through August 2014 E. Review of Legal Expenses through July 2014 F. Review of Board Budget through July 2014 G. Review of Legislative Consultants Budget through July 2014

VII. General member comments, questions and items for future Committee meetings VIII. Public Comment (limited to 3 minutes)

IX. Adjournment

Items will not necessarily be considered in the sequence listed. This meeting may be continued if all of the items are not covered in the time allowed. If the meeting is to be continued, the time and place will be announced at the end of the portion of the meeting to be continued. Supporting Material: The designated contact to obtain supporting material is the Clerk of the Board, P.O. Box 12490, Reno, NV, 89510 or 775-328-6410. Supporting material is also available at the Reno-Tahoe Airport (Administrative Offices) and at the scheduled meeting. Members of the public who are disabled and require special accommodations or assistance at the meeting are requested to notify the Clerk of the Board in writing at P.O. Box 12490, Reno, Nevada 89510 or by calling (775) 328-6410 prior to the meeting date. THIS NOTICE HAS BEEN POSTED AT THE FOLLOWING LOCATIONS: 1. Airport Authority Administrative Offices – 2001 E. Plumb Lane, Reno 3. Reno City Hall – One East First Street, Reno 2. Washoe County Administrative Offices – 1001 E. 9th Street, Reno 4. Sparks City Hall – 431 Prater Way, Sparks

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*** These draft minutes have not yet been approved and are subject to revision at the next regularly scheduled meeting. ***

RENO-TAHOE AIRPORT AUTHORITY BOARD OF TRUSTEES FINANCE AND BUSINESS DEVELOPMENT COMMITTEE

Minutes from the Meeting August 12, 2014

9:00 a.m.

In Attendance: Dr. Kosta Arger, Trustee*

Steve Katzmann, Trustee* Rick Murdock, Trustee*

Bill Eck, Trustee Jerry Hall, Trustee

Bob Larkin, Trustee Marily Mora, President/CEO Dean Schultz, Executive Vice-President/COO Ann Morgan, Fennemore Craig Jones Vargas Rick Gorman, Chief Financial Officer Tina Iftiger, Vice President of Airport Economic Development Brian Kulpin, Vice President of Marketing & Public Affairs Leah Williams, Manager of Accounting Tony Osendorf, Manager of Budget & Finance Laurie Weeks, Manager of Concessions Joyce Humphrey, Manager of Purchasing & Materials Patrick North, Senior Internal Auditor David Pittman, Director of Facilities & Maintenance Randy Whitworth, Building Maintenance Superintendent Bill Heath, Building Maintenance & Services Supervisors Ken Moen, Economic Development Specialist Chrissy Gonzales, Administrative Assistant II Burnham Moffat, Reno Tahoe Airport Group Bob Meurer, President of Reno Tahoe Airport Group * Denotes Finance Committee member

TOPICS DISCUSSED: I. REVIEW OF MEETING MINUTES FROM JULY 8, 2014

A motion was made by Trustee Murdock, Seconded by Trustee Katzmann and the Committee unanimously approved the minutes from the July 8, 2014 Finance and Business Development Committee meeting.

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II. PUBLIC COMMENT None III. ITEMS TO BE PRESENTED TO THE FINANCE AND BUSINESS

DEVELOPMENT COMMITTEE FOR REVIEW AND RECOMMENDATION TO THE BOARD:

A. #14(08)-36 AUTHORIZATION FOR THE PRESIDENT/CEO TO

NEGOTIATE FINAL TERMS AND EXECUTE A NEW 8-YEAR, 8-MONTH COMMERCIAL LEASE AGREEMENT BETWEEN PRO BUMPER REPAIR AND THE RENO-TAHOE AIRPORT AUTHORITY FOR 6,778 SQUARE FEET OF COMMERCIAL SPACE AT THE WAREHOUSE FACILITY LOCATED AT 2890 VASSAR STREET

Staff gave a presentation requesting authorization for the President/CEO to negotiate final terms and execute a new 8-year, 8 month commercial lease agreement between Pro Bumper Repair and the Reno-Tahoe Airport Authority (RTAA) for 6,778 square feet of commercial space at the warehouse facility located at 2890 Vassar Street. With Pro Bumper currently leasing the building located at 1200 Terminal Way, Trustee Murdock inquired whether Pro Bumper will operate at both locations. Staff stated “yes”. Due to the need for additional space, Pro Bumper will operate their business from both locations. Trustee Murdock inquired about the reason for installing a new fire alarm system at the building. Staff responded that in order for the facility to be leased, the fire alarm system was required under City of Reno building code. Trustee Arger asked for clarification whether Pro Bumper is paying for its portion of the cost of the fire alarm system. Staff stated the costs of installing the fire alarm system and the heating, ventilation and air conditioning (HVAC) and heating unit upgrade, will be recovered through the rent payments received from Pro Bumper over the term of the agreement. Trustee Murdock inquired whether the HVAC and heating units, in the amount of $32,000, will serve only the Pro Bumper leased area or the whole building. Staff stated the HVAC and heating units will be solely for the space that Pro Bumper will be occupying. A motion was made by Trustee Katzmann; Seconded by Trustee Murdock and the Committee unanimously recommended this item [#14(08)-36] to the Board for approval at the upcoming Board meeting.

B. #14(08)-37 AUTHORIZATION FOR THE PRESIDENT/CEO TO EXECUTE

THE SECOND ONE-YEAR RENEWAL OPTION OF THE JANITORIAL

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SERVICES AGREEMENT, WITH ABM JANITORIAL SERVICES, FOR JULY 1, 2014 THROUGH JUNE 30, 2015, IN THE AMOUNT OF $181,671

Staff gave a presentation requesting the authorization for the President/CEO to execute the second one-year renewal option of the janitorial services agreement with ABM Janitorial Services, for July 1, 2014 through June 30, 2015, in the amount of $181,671. Trustee Katzmann wanted clarification as to the additional scope of work included in the current contract with the completion of the Consolidated Security Checkpoint project. Staff stated that the RTAA added significant new areas of carpeting at the checkpoint entrance/queuing area, art gallery, and children’s play area. In addition, three new restroom facilities were added in the upstairs connecting concourse along with the new wall of windows facing east. Trustee Murdock inquired as to how the cost for janitorial services under this second renewal option compare to the current agreement. Staff stated the additional work scope discussed above was included in the first renewal option and the cost of $181,671 for the second option is unchanged from the current agreement. Trustee Arger inquired if the RTAA was pleased with ABM Janitorial Services’ performance. Staff stated that the RTAA was very satisfied with the services. Trustee Arger also inquired as to why not renew the agreement for a term longer than one (1) year. Staff stated that before the proposed renewal option expires on June 30, 2015, the contract will go out for formal bid. The structure of the new agreement will provide for a four (4) to five (5) year contract. A motion was made by Trustee Murdock; Seconded by Trustee Katzmann and the Committee unanimously recommended this item [#14(08)-37] to the Board for approval at the upcoming Board meeting.

IV. ITEMS PRESENTED TO THE FINANCE AND BUSINESS DEVELOPMENT COMMITTEE FOR APPROVAL

A. AUDIT PLAN JULY 1, 2014 THROUGH JUNE 30, 2015 Staff gave a presentation on the Audit Plan for July 1, 2014 through June 30, 2015. Trustee Larkin asked for clarification on the section of the Audit Plan associated with the upgrade of the Parking and Revenue Control System. Staff stated that in 2006 the Authority purchased a parking and revenue control system from Scheidt & Bachmann. Recently, the RTAA purchased new computer hardware from Scheidt & Bachmann to replace equipment at the end of its useful life and installed new, upgraded software. The new software provides enhanced functionality and is certified to be in compliance with payment card industry standards. The upgrade

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project is on-going and Scheidt & Bachmann continues to work on the controls and reports that the RTAA needs. Trustee Arger inquired wasn’t this capital project approved by the Board a while back and why has Scheidt & Bachmann not completed the upgrade. Staff stated the upgrade project was originally approved in 2011. Staff also stated that there were two different actions approved by the Board: (1) the upgrade of the computer hardware and software components of the system and (2) the maintenance agreement that provides day-to-day maintenance and upkeep of the equipment. Staff further stated that the project is approximately 80% complete. Final acceptance of the upgrade project is dependent upon Scheidt & Bachmann resolving several lingering issues such as the license plate recognition software. RTAA continues to withhold final payment on the system pending final acceptance. Trustee Larkin asked what accounting methodology is used to report free parking provided under the parking policy. Staff stated that parking provided free of charge is not included in reported revenues. As outlined in the parking policy, an approved list of persons or a special event allowed to be validated are audited on daily basis to ensure compliance with the policy. In addition, the Internal Audit department monitors validated parking by name, type, duration, and dollar amount. Trustee Larkin asked for clarification as to what accounting standard is the RTAA following – generally accepted accounting principles or governmental accounting principles. Staff stated that the RTAA is using general accepted accounting principles. Trustee Larkin indicated his view is that parking revenues including the value of validated parking should be recorded in total with an offsetting parking validation expense booked to provide more transparent reporting. Trustee Larkin asked that staff go back and review the current accounting approach. Staff stated that they will review accounting literature, talk with the external auditors and make sure the RTAA is complying with proper reporting procedures. Trustee Katzmann asked for clarification on the need for an audit plan with a detailed hourly breakdown and whether this approach was a regulatory requirement. President/CEO Marily Mora responded there is no regulatory requirement; however, it has been the practice of the RTAA to establish a detailed work plan to determine what can be accomplished during the year. General Counsel Ann Morgan reiterated that she reviewed the parking policy and found it was legally in compliance with laws and requirements under which the RTAA is required to operate. A motion was made by Trustee Katzmann; Seconded by Trustee Murdock and the Committee unanimously approved the Audit Plan for the period of July 1, 2014 through June 30, 2015.

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V. ITEMS PRESENTED TO THE FINANCE AND BUSINESS DEVELOPMENT

COMMITTEE FOR DISCUSSION

A. GENERAL AVIATION CUSTOMER SERVICE AND MARKETING PROGRAM

Staff gave a presentation on the General Aviation Customer Service and Marketing Program. Trustee Arger inquired as to how many permanent tie-downs are located at the Reno-Tahoe International Airport (RTIA). Bob Meurer, President of Reno Tahoe Airport Group (RTAG) stated there are about 20 to 25 tie-downs on the field. Staff also stated that some of the tie-down spaces are leased by Atlantic Aviation. Trustee Arger inquired as to why tenants would want a tie-down rather than a hangar. Bob Meurer stated that the rate for a tie-down space is three (3) times less expensive than the rate of a hangar. Trustee Arger asked for clarification regarding the contract terms between the RTAA and Atlantic Aviation for the marketing of available hangar space. Staff stated that Atlantic Aviation is contractually obligated to market the availability of hangars; however, the RTAA is ultimately responsible to pay for any expenses towards marketing. Therefore, staff indicated the steps outlined in the presentation represent RTAA expanding its efforts to market available hangars and reduce the current vacancy rate.

VI. ITEMS PRESENTED TO THE FINANCE AND BUSINESS DEVELOPMENT COMMITTEE FOR INFORMATION

A. INVESTMENT PORTFOLIO REPORT FOR THE QUARTER ENDED JUNE

2014 Staff reported on the Investment Portfolio Report for the Quarter ended June 2014. Trustee Larkin asked if the RTAA was pleased with the Washoe County Investment Pool. Staff stated that the RTAA is very satisfied with the performance of the Washoe County Investment Pool and the customer service provided by Washoe County. B. REVIEW OF OPERATING RESULTS THROUGH JUNE 2014

Staff reported on the Operating Results through June 2014.

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C. REVIEW OF BUDGET TRANSFERS Staff reported on one (1) budget transfer to increase the funding for 1675 National Guard Way Parking Lot Light Replacement project in the amount of $2,935. The original adopted budget for this project was $10,560.

D. REVIEW OF CONTRACTS AND PROFESSIONAL SERVICES AGREEMENTS THROUGH JULY 2014 Staff reviewed the Administrative Award of Contracts pursuant to Resolution #462 through the month of July 2014. Trustee Katzmann asked for clarification as to why the new agreement with ABM Janitorial Services approved in item III (B) did not include work at the Reno-Stead Airport outlined under Blanket PO 5902 for $11,840. Staff stated that when the original bid was issued, the work scope did not include the new Reno-Stead Airport Terminal Building. Therefore, the work could not be awarded under the existing contract. The RTAA, however, will include this work in the bid package to be issued in 2015 as outlined earlier. Trustee Katzmann asked for clarification of the ABM Janitorial Blanket PO as to whether the RTAA will be paying the $11,800 twice a year. Staff stated “no”. The $11,800 is the annual cost for the services provided on a weekly, semi-annually, or quarterly basis. Trustee Katzmann asked for clarification regarding the Tennant Company Blanket PO of $15,500. Does this contract maintain equipment used by ABM Janitorial Services as part of its janitorial contract? Staff indicated “no”. ABM Janitorial is responsible for providing and maintaining the equipment it uses under its contract. This Blanket PO is a separate agreement for the annual preventative maintenance on equipment owned and operated by RTAA only. E. REVIEW OF LEGAL EXPENSES THROUGH JUNE 2014

Staff reported the Legal Budget was 98.3% expended with 100% of the budget year expired. Trustee Arger inquired as to whether the final Air Race Accident legal expenses have been accounted for in FY 2013-14 and will this item no longer be reported in the Administrative Report in July 2014. Staff stated that “yes” it has been accounted for and, starting with next month’s Administrative Report, this item will be removed.

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F. REVIEW OF BOARD BUDGET THROUGH JUNE 2014 Staff reported the Board of Trustee’s budget was 68.3% expended with 100% of the budget year expired. G. REVIEW OF LEGISLATIVE CONSULTANTS BUDGET THROUGH JUNE

2014 Staff reported the Legislative Consultants Budget was 95.5% expended with 100% of the budget year expired.

VIII. GENERAL MEMBER COMMENTS, QUESTIONS AND ITEMS FOR FUTURE COMMITTEE MEETINGS

After a discussion between the Trustees and staff regarding landing fees and

insurance requirements for Part 135 charter operations during the 2014 Burning Man festival, President/CEO Marily Mora reported a meeting is scheduled with impacted charter operators to discuss any issues and concerns. With the Authority becoming fully aware of the size and scope of charter services during this event, staff wants open discussion regarding the RTAA’s expectations regarding operating standards and fees for use of Reno-Tahoe International Airport.

IX. PUBLIC COMMENT

None

X. ADJOURNMENT

The meeting was called to order at 9:00 a.m. and was adjourned at 10:52 a.m. AK: RG/cg

*** These draft minutes have not yet been approved and are subject to revision at the next regularly scheduled meeting. ***

Board Memorandum Reno-Tahoe Airport Authority

**REVISED** Date: September 3, 2014 Memo #14(09)-43 To: Chairman & Board Members For: September 11, 2014 Board Meeting From: Marily M. Mora, A.A.E., President/CEO Subject: AUTHORIZATION FOR THE PRESIDENT/CEO TO EXECUTE A

PROFESSIONAL SERVICES AGREEMENT WITH BROCK SOLUTIONS FOR THE UPGRADE AND REPLACEMENT OF HARDWARE AND SOFTWARE, AND THE CONFIGURATION SERVICES REQUIRED TO UPGRADE THE IN-LINE BAGGAGE HANDLING SYSTEM CONTROLS OWNED AND OPERATED BY THE RENO-TAHOE AIRPORT AUTHORITY, EXEMPT FROM COMPETITIVE BIDDING PURSUANT TO NRS 332.115, IN AN AMOUNT NOT TO EXCEED $210,975

STAFF RECOMMENDATION Staff recommends that the Board authorize the President/CEO to execute a Professional Services Agreement (PSA) with Brock Solutions for the upgrade and replacement of hardware and software, and the configuration services required to upgrade the in-line Baggage Handling System (BHS) controls owned and operated by the Reno-Tahoe Airport Authority (RTAA), exempt from competitive bidding pursuant to NRS 332.115, in an amount not to exceed $210,975. PURPOSE The purpose of this action is to obtain Board of Trustee approval and authorization for the President/CEO to execute a professional services agreement for the hardware replacement, software upgrade and configuration services for the RTAA. This action is in support of the Guiding Principles of Safety and Security, Customer Service and Financial Integrity, as identified in the RTAA Fiscal Year (FY) 2014-2018 Comprehensive Strategic Plan as it will allow the necessary upgrades to the critical controls and operating system of the BHS to be implemented for maximum efficiency and operational utilization of the system. BACKGROUND The BHS system was installed and became operational in 2009. During the design of the system, Brock Solutions was chosen by the architectural and engineering firm as the proprietary controls and software operating system provider for the BHS. This is the complex computer and Programmable Logic Controls (PLC) system that run the timing and operation of the three individual BHS matrices that is comprised of 1.17 miles of conveyors, 441 variable frequency drive (VFD) motors, an extensive motor control panels (MCP) configuration, bag measuring arrays (BMA) and the various conveyor diverters and vertical sorter devices. Due to Brock Solutions propriety ownership of this software controls system, the BHS maintenance service provider Elite Line Services (ELS) is required by their contract to maintain an annual contractual agreement with Brock Solutions for support and maintenance of this critical computerized operating system.

Brock Solutions Professional Services Agreement #14(09)-43 September 11, 2014 Board Meeting Page 2 of 3 DISCUSSION The Brock Solutions computer server hardware equipment and software is the central operating core that controls the complex PLC program of the BHS and is currently five (5) years old. It is an industry standard to replace computer hardware and upgrade any available software updates in the five year timeline due to life expectancy, reliability, and maintain vendor support of the systems. The scope of the project includes replacement of the server and operator workstation hardware as well as installation of updated program software. The existing system performance reporting software application will also be recompiled to better support communication with the server software replacement upgrade applications. The project hardware replacement includes two Operator Workstations in the Central Control Room, and the replacement of eight computer monitors for the Human-Machine Interface (HMI) display and a laser printer. The purpose of the HMI application is to display a graphical and textual overview of the mechanical system and component status information, and to allow operator control of the system and various components of the system from the BHS Central Control Room. Per the Nevada Revised Statute (NRS) 332.115, the RTAA is allowed to directly award the professional services on items or services that can only be contracted from a sole source. Due to the proprietary design and ownership of the software and Programmable Logic Controls (PLC) by Brock Solutions, they are the only provider that can service and support the BHS Controls System. The specific language of NRS 332.115 is provided below. NRS 332.115 Contracts not adapted to award by competitive bidding; purchase of equipment by local law enforcement agency, response agency or other local governmental agency; purchase of goods commonly used by hospital. 1. Contracts which by their nature are not adapted to award by competitive bidding, including contracts for:

a) Items which may only be contracted from a sole source; b) Professional services; c) Additions to and repairs and maintenance of equipment which may be more efficiently

added to, repaired or maintained by a certain person; d) Equipment which, by reason of the training of the personnel or of an inventory of

replacement parts maintained by the local government is compatible with existing equipment;

e) Perishable goods; f) Insurance; g) Hardware and associated peripheral equipment and devices for computers; h) Software for computers.

COMPANY BACKGROUND As one of North America’s largest real-time automated systems providers, Brock Solutions has designed, developed and deployed over 4,000 automation control systems worldwide. Their company has over 300 professionals in six offices located in Texas, Michigan, Indiana, Puerto Rico and Canada. Brock Solutions has over 30 years of experience in automation engineering

Brock Solutions Professional Services Agreement #14(09)-43 September 11, 2014 Board Meeting Page 3 of 3 and over 15 years of baggage handling system controls experience. They have completed nearly 200 baggage handling projects totaling over $300 million dollars. FISCAL IMPACT The funding for this professional service and systems upgrade was included in the recently adopted FY 2014-2015 Building Maintenance section’s operating and maintenance budget for the baggage handling system. The total amount budgeted for this project is $225,000. Per agreement with the signatory airlines, this project will be recovered over a three (3) year period in installments of $75,000 as part of the Baggage Handling System Charge. The cost of operating and maintaining the BHS system is 100% reimbursable from the airlines on a $1.42 per processed bag fee as outlined in the current year Master Fee Resolution. COMMITTEE COORDINATION This item is scheduled to be presented at the September 9, 2014 Finance and Business Development Committee meeting. RECOMMENDED MOTION It is hereby recommended that the Board adopt the following motion: “Authorize the President/CEO to execute a Professional Services Agreement (PSA) with Brock Solutions for the upgrade and replacement of hardware and software, and the configuration services required to upgrade the in-line Baggage Handling System (BHS) controls owned and operated by the Reno-Tahoe Airport Authority (RTAA), exempt from competitive bidding pursuant to NRS 332.115, in an amount not to exceed $210,975.” MMM/dgp/cj


Date: September 3, 2014 Memo #14(09)-44 To: Chairman & Board Members For: September 11, 2014 Board Meeting From: Marily M. Mora, A.A.E., President/CEO Subject: AUTHORIZATION FOR THE PRESIDENT/CEO TO NEGOTIATE FINAL TERMS

AND EXECUTE A NEW 5-YEAR, 3-MONTH NON-COMMERCIAL HANGAR LEASE AGREEMENT WITH ONE, 5-YEAR OPTION TO EXTEND BETWEEN CHALLENGER CONSULTING, LLC AND THE RENO-TAHOE AIRPORT AUTHORITY FOR BOX HANGAR 10 LOCATED AT GENERAL AVIATION WEST AT THE RENO-TAHOE INTERNATIONAL AIRPORT

STAFF RECOMMENDATION Staff recommends that the Board authorize the President/CEO to negotiate final terms and execute a new 5-year, 3-month Non-Commercial Hangar Lease Agreement with one, 5-year Option to Extend between Challenger Consulting, LLC and the Reno-Tahoe Airport Authority (RTAA) for Box Hangar 10 located at General Aviation (GA) West at the Reno-Tahoe International Airport (RNO). PURPOSE The purpose of this action is to seek approval from the Board to authorize the President/CEO to complete negotiations and execute a new 5-year, 3-month Non-Commercial Hangar Lease Agreement with one, 5-year Option to Extend between Challenger Consulting, LLC and the RTAA for Hangar 10 located at 1880 Gentry Way. This action is in support of Priority Number 2 of the Board-approved Fiscal Year (FY) 2014-2018 Comprehensive Strategic Plan by optimizing GA operations and services at Reno-Tahoe International Airport. This action also supports Priority Number Four by facilitating continued economic development for the RTAA and ensuring its financial growth and stability as a self-sustaining entity by maximizing non-airline revenue. BACKGROUND On July 1, 2010, the ownership of property at 1880 Gentry Way, currently known as GA West, reverted to the RTAA. The property consists of five (5) box hangars, a Fixed Based Operator office and thirty-one (31) T-Hangars. At the time of ownership reversion, GA West Box Hangar 10 was leased by American Operations (Mr. Pennington). American Operations remained a tenant until July 2012. The hangar has been vacant since August 2012 due to the challenges of attracting a single tenant to this large hangar. Hangar 10 consists of 17,175 square feet of hangar and associated office space with approximately 6,000 square feet of aircraft ramp immediately adjacent to the hangar. (See attached Exhibit A)

Challenger Consulting, LLC – Hangar 10 #14(09)-44 September 11, 2014 Board Meeting Page 2 of 3

DISCUSSION In May 2014, Challenger Consulting, LLC contacted staff regarding leasing Hangar 10 to accommodate two aircraft including a Learjet 40XR and a Challenger 350. Challenger Consulting, LLC is seeking a 5-year, 3-month term beginning October 1, 2014 through December 31, 2020 with an Option to Extend the term an additional 5-years from January 1, 2021 to December 31, 2025 subject to approval by both parties. Challenger Consulting, LLC is a current RNO tenant that wishes to relocate from a shared box hangar on the east side to a private box hangar on the west side for the purposes of dry storage of aircraft owned by Challenger Consulting, LLC. Leasing Hangar 10, which has been vacant for two years, will allow them exclusive use of the hangar. Challenger Consulting, LLC understands that this lease is for non-commercial purposes only. Although Challenger Consulting, LLC anticipates dry storage of two aircraft, based on the size of the hangar, they have also requested the ability to share, or sublease, the hangar to one additional aircraft owner. By allowing Challenger Consulting, LLC to sublease space in the hangar to one other non-commercial aircraft owner, it will help offset the annual rent for the large hangar. Staff supports this request and Challenger Consulting, LLC understands RTAA must approve the sublease prior to move in and that if a sublease is approved, the same non-commercial lease agreement terms and conditions will apply. Challenger Consulting, LLC will also be responsible for all utility expenses as well as maintenance and repair of the premises. As a result of Hangar 10 being vacant for two years, it is in need of improvements. Challenger Consulting, LLC has agreed to lease the hangar, but has proposed approximately $25,000 in tenant improvements to the hangar and associated office space. The tenant improvements proposed include, but are not limited to: (a) hangar door improvements; (b) office and kitchen remodeling; and (c) building improvements based on current Fire Code requirements. Challenger Consulting, LLC will have 12 months to complete tenant improvements to the hangar. To help offset a portion of the proposed $25,000 in tenant improvement costs incurred by Challenger Consulting, LLC, Staff proposes a rent credit equivalent to three months’ rent to Challenger Consulting, LLC. The three months of rent credit is valued at $22,722.96. COMPANY BACKGROUND Challenger Consulting, LLC is owned and operated by Mr. Perry Di Loreto. Mr. Di Loreto owns and operates Di Loreto Construction, Di Loreto Homes, and the Damonte Ranch master planned community. Mr. Di Loreto has been creating homes, services, amenities and jobs in the Reno area for over 36 years and continues to enhance the beauty of the landscape throughout Nevada.

Challenger Consulting, LLC – Hangar 10 #14(09)-44 September 11, 2014 Board Meeting Page 3 of 3

FISCAL IMPACT The proposed lease term is 5-years, 3-months effective October 1, 2014. The proposed lease rate for Year 1 is consistent with the RTAA Master Fees for Fiscal Year 2014-2015. To help offset a portion of the tenant improvement costs incurred by Challenger Consulting, LLC, staff proposes that the RTAA extend a rent credit to Challenger Consulting, LLC for the first three months. The three months of rent credit is valued at $22,722.96; the value of Challenger Consulting, LLC tenant improvements is estimated at $25,000. Challenger Consulting, LLC proposes to provide tenant improvements including: (a) hangar door improvements; (b) office and kitchen remodeling; and, (c) building improvements based on current Fire Code requirements. The improvements will be performed by Di Loreto Construction. Over the term of the lease, Challenger Consulting, LLC will also be responsible for all utility expenses as well as maintenance and repair of the premises. Including the rent credit, the Year 1 rental revenue (scheduled to begin January 1, 2015) is projected to be $90,891.95. The table below outlines the estimated revenues over the term of the Lease:

Facility Square Footage

Price per Square Foot

Annual Revenue

Term 5-Years,

3 -Months* 10-Years

(5-Year Option) Hangar 10 17,175 $0.42362 $87,308 $436,540 $873,080 Aircraft Apron 6,000 $0.049776 $ 3,583 $ 17,919 $ 35,838

TOTAL $90,891 $454,459 $908,918 *assumes rent credit for first three months The minimum contract value for the 5-year, 3-month term (assuming a three month rent credit) is $454,459. Should the Option to Extend be exercised, the minimum contract value would increase to $908,918. The lease rate is proposed to be adjusted annually beginning October 1, 2015 based on the Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers (CPI-U) with an annual increase not to exceed three percent (3%). COMMITTEE COORDINATION This item is scheduled to be presented at the September 9, 2014 Finance and Business Development Committee meeting. RECOMMENDED MOTION It is hereby recommended that the Board adopt the following motion: “Authorize the President/CEO to negotiate final terms and execute a new 5-year, 3-month Non-Commercial Hangar Lease Agreement with one, 5-year Option to Extend between Challenger Consulting, LLC and the Reno-Tahoe Airport Authority (RTAA) for Box Hangar 10 Located at General Aviation (GA) West at the Reno-Tahoe International Airport (RNO).” MMM/sh/cj

EXHIBIT A General Aviation West

Hangar 10 (Challenger Consulting, LLC)

Hangar 10

Hangar Area 17,175 sf Total Lease Area 23,175 sf

#14(09)-44


Date: September 3, 2014 Memo #14(09)-48 To: Chairman and Board Members For: September 11, 2014 Board Meeting From: Marily M. Mora, A.A.E., President/CEO Subject: AUTHORIZATION FOR THE PRESIDENT/CEO TO RELEASE SEVEN T-

HANGARS (W27-W33) LOCATED AT GENERAL AVIATION WEST AT THE RENO-TAHOE INTERNATIONAL AIRPORT AND TO EXECUTE CONTRACTS TO BOTH REHABILITATE AND REPAIR REQUIRED PAVEMENT AND T-HANGARS

STAFF RECOMMENDATION Staff recommends the Board authorize the President/CEO to release seven (7) T-Hangars (W27-W33) located at General Aviation (GA) West at the Reno-Tahoe International Airport (RTIA) and to execute contracts to both rehabilitate and repair required pavement and T-Hangars. PURPOSE The purpose of this memo is to seek Board authorization to release additional T-Hangars at GA West and to authorize the President/CEO to execute contracts for costs associated with pavement rehabilitation and T-Hangar repairs. This work is necessary in order to bring additional T-Hangars at GA West to a leasable condition, and aligns with the Board’s direction to release and rehabilitate additional T-Hangars at GA West upon evident demand (Agenda Item #13(02)-08 on February 14, 2013 and Agenda Item #14(07)-32 on July 10, 2014). This action is in support of the Reno-Tahoe Airport Authority (RTAA) Strategic Priority # 4 Optimizing General Aviation Operations and Services as identified in the Fiscal Year (FY) 2014-2018 Comprehensive Strategic Plan. BACKGROUND At the June 2010 Board of Trustees meeting, the Board adopted Resolution No. 502 in preparation for the reversion of GA facilities to RTAA ownership on July 1, 2010. Resolution No. 502 authorized the President/CEO to allow current tenants to enter into new lease agreements and remain in T-Hangars located at both GA East and GA West at the RTIA. At the May 2011 RTAA Board Meeting, the Board adopted several new policies and goals supporting General Aviation including:

• Reaffirming the Authority’s planning efforts to focus future GA development on the east side of the airport.

General Aviation West T-Hangar Release and Improvements #14(09)-48 September 11, 2014 Board Meeting Page 2 of 6

• Modifying T-Hangar Leasing Guidelines to allow GA West T-Hangar rentals on a month-to-month basis after existing leases expire. The lease term was subsequently changed at the May 17, 2012 Board Meeting to include multi-year leases, but in no event is any GA West T-Hangar lease term to exceed June 30, 2017.

• Creating the RTIA User Committee with representation from the GA Community. Subsequent to the adoption of these policies, representatives from the Reno-Tahoe Aviation Group (RTAG) notified the Board that demand for T-Hangars existed and requested the RTAA consider making additional T-Hangars available for lease on the west side of the airfield. At an October 2011 Board Retreat, the Board directed staff to work with the RTAG to assess demand for GA West T-Hangars and to structure a proposal that, at a minimum, allows the RTAA to recover any future site improvements on a full cost recovery basis through rent rates. Given the long-term policy of new GA development to be focused on the east side, future investment on the west side should be limited. At the April 2012 Board Meeting, the Board discussed the existing vacant T-Hangars at GA West and whether or not to lease them. As a result of that discussion, the Board directed staff to develop a phased plan to release up to 23 additional T-Hangars at GA West for lease. It was determined that, in order to make the additional GA West T-Hangars safe and functional, significant repairs to the T-Hangars and associated pavement would be required. At the May 2012 Meeting of the Board of Trustees, the Board approved the following:

• The phased release of 23 additional T-Hangars based on market demand and leasing activity to include the following phasing:

(1) Phase I release of an additional 8 T-Hangars (center);

(2) Phase II release of an additional 8 T-Hangars (north); and

(3) Phase III release of an additional 7 T-Hangars (south).

• Capital improvements for Phase I pavement rehabilitation, including substantial patching, crack sealing, and slurry sealing, which was completed in August 2012 on deficient areas of pavement adjacent to 16 T-Hangars in the center section of the development.

• Beginning July 1, 2012, lease periods were made available on a month-to-month basis or up to 5 years in length. Staff recommended that all GA West T-Hangar leases not extend beyond June 30, 2017.

• Based on a 5-year term and a reasonable interest rate, the annual cost recovery for the pavement rehabilitation improvements was estimated and a monthly pavement improvement assessment of $102 per month was incorporated into the monthly rental fees.

• T-Hangar door repairs or replacement and minor structural improvements to sheet metal siding, handles and locks was authorized and incorporated into the adopted FY 2012-2013 budget.

General Aviation West T-Hangar Release and Improvements #14(09)-48 September 11, 2014 Board Meeting Page 3 of 6 At the February 2013 Board Meeting (#13(02)-08), staff provided an updated chronology on GA West T-Hangars and the following was authorized by the Board:

• Waiver of the $102 monthly GA West Pavement Rehabilitation Fee identified in Resolution No. 509 for all RTIA GA West T-Hangar tenants, effective March 1, 2013.

• Halt additional expenditures identified for pavement rehabilitation for Phases II and III at GA West until T-Hangar demand is evident. There is to be no further investment in GA West T-Hangars without Board Approval.

At the March 2014 Finance and Business Development Committee meeting, staff recommended the release of an additional eight (8) GA West T-Hangars identified as Phase II above and Option A below, which are located on the north side of the T-Hangar complex at GA West. The Finance and Business Development Committee recommended to the Board, who subsequently voted to table the release of additional GA West T-Hangars to a future meeting in order to explore other options, and to review the preliminary findings of the InterVISTAS General Aviation Development Analysis. Following the March 2014 Finance and Business Development Committee decision, several Trustees and staff toured the GA West T-Hangar complex that included a visual inspection of the T-Hangars and pavement conditions. It was noted that there is a historical slope issue with the apron that services W4 through W8 that may impact the ability of an aircraft operator to roll an aircraft into and out of the hangar manually. The group also looked at the southern hangars W27 –W33. RTAA received input that this area needed minimal improvements to make it operational and a security fence could be relocated to open up the area. After the tour, the Trustees asked staff to bring the item back to the Finance and Business Development Committee with alternative options and associated costs (see attached Exhibits A and B), including a reassessment of the rehabilitation and repair requirements. At the June 2014 Board of Trustees meeting, InterVISTAS presented the General Aviation Development Analysis findings. Of the approximate 100 RTIA users and tenants surveyed, 10 of the 16 respondents (63%) indicated the desire for additional hangars at RTIA. Given that there are only nine (9) T-Hangars currently available at RTIA, the survey results suggest potential demand for another T-Hangar release. At the July 2014 Finance and Business Development Committee meeting, staff recommended releasing seven (7) T-Hangars (W27-W33) located at GA West at the RTIA. The release would include rehabilitation and/or repair of both T-Hangars and associated pavement. At that time, GA West occupancy rate was 81% (13 of 16 T-Hangars are occupied) and GA East occupancy rate was approximately 90% (51 of 57 T-Hangars are occupied). The Finance and Business Development Committee recommended postponing the release. The Board subsequently approved the postponement until the September 2014 Board meeting due to inadequate market demand.

General Aviation West T-Hangar Release and Improvements #14(09)-48 September 11, 2014 Board Meeting Page 4 of 6 DISCUSSION At the August 2014 Finance and Business Development Committee meeting, staff presented the T-Hangar Marketing Plan. In conjunction with Atlantic Aviation, staff is implementing several of the elements in the Marketing Plan including direct mail flyers, new signage at the FBO office, and new tenant incentives. As a result of these marketing efforts and the increased awareness of available T-Hangars at the RTIA, staff has received a number of new inquiries since the item was presented in July, including one new lease at GA West, increasing the occupancy level to 87% (14 of 16 T-Hangars occupied). Conversely, GA East occupancy is at 88% (50 of 57 T-Hangars are occupied) which is a decrease in one tenant since July, resulting in no net change overall. The InterVISTAS General Aviation Development Strategy final report was finalized in August and included the following statement regarding hangar demand:

“The survey of tenants at RNO (and RTS) identified additional hangar access as high priorities. This would suggest but not necessarily demonstrate unequivocally that there is unmet demand for hangar space. A survey of flyers at RNO (and RTS) cannot quantify the extent to which individuals, companies, or organizations who do not currently base their aircraft at either of those airports [RNO or RTS] would be willing to move their aircraft to RNO (or RTS) if the availability of hangars was greater.”

Given the consistent occupancy levels over the past couple months, the recent increase in inquiries from the new marketing efforts and the InterVISTAS survey findings suggesting potential demand for hangars, should the Board decide to release additional GA West T-Hangars, staff again recommends Option D as outlined below. As discussed at the July 2014 Board Meeting, below are five (5) options representing a T-Hangar release strategy ranging from 3 to 15 GA West T- Hangars. Additionally, Option A has a second variant named Option A (Amended) to address the historical slope issue. See attached Exhibit A for impacted T-Hangars and pavement areas and Exhibit B for cost estimates.

Option A Option A includes GA West T-Hangars W1-W8 (8 T-Hangars) originally presented to the March 2014 Finance and Business Development Committee as Phase II. These T-Hangars range in sizes; five (W4 – W8) are 1,380 square feet and three (W1-W3) are 1,600 square feet or larger. This provides options that may facilitate quicker market absorption due to more consumer choice. With this option, the release of these eight (8) T-Hangars will require a $74,849 capital investment for the mill and fill of the full-length of the north hangar row, but does not account for the reconstruction of the historical slope issue, which may impede the market potential (refer to Option A (Amended) below). Option A (Amended) This option includes the same GA West T-Hangars as Option A above; however, this Amended Option A include improvements to address the historical slope issue. If the historical slope issue is to be improved, the cost of pavement reconstruction as well as


addressing an amended drainage system with the reconstruction will have a total cost of $224,256. This Option is noted on Exhibit B as Option A (Amended). Option B Option B, a smaller portion of Option A (W1-W3) would allow the release of three (3) additional T-Hangars quickly with a minimal capital investment of $21,772. T-Hangars W1-W3 are approximately 1,600 square feet or larger and may be less desirable due to their larger than average size. Option C Option C would release T-Hangars W27-W33 (7 T-Hangars) for an approximate $83,512 of capital investment. This option requires relocation of the fence that RTAA installed to facilitate landside access and improve safety and security at GA West. The relocation of the fence represents the majority of the estimated cost. Option C requires minimum site improvements, but includes pavement surface sweeping without a slurry seal. Option D Option D would also release T-Hangars W27-W33 (7 T-Hangars) for an approximate $89,752 in capital investment. Like Option C, this option requires the relocation of the fence at GA West. This option requires site improvements similar to Option C, but also includes a slurry seal of the pavement surface to reduce further deterioration. Option D addresses potential demand and optimizes GA facilities and services. Additionally, the pavement improvements provided with Option D offer a higher quality product that will enhance the market potential.

FISCAL IMPACT The following summary provides the estimated revenues, operating expenses, capital investment, and projected return on investment of each option for the period of January 1, 2015 through December 31, 2020.

For the 6 Year Period of January 1, 2015 through December 31, 2020

Option A Original

8 Hangars W-1 to W-8

Option A Amended 8 Hangars

W-1 to W-8

Option B 3 Hangars

W-1 to W-3

Option C 7 Hangars W-27 to

W-33

Option D 7 Hangars W-27 to

W-33 Rent Revenue (a) $244,075 $244,075 $102,766 $166,149 $166,149 Operating Expenses (b) (61,019) (61,019) (25,691) (41,537) (41,537) Net Operating Revenue $183,056 $183,056 $77,075 $124,612 $124,612 Capital Investment (c) ($74,849) ($224,256) ($21,772) ($83,512) ($89,752) Net Cash Flow $108,207 ($41,200) $55,303 $41,100 $34,860 Return on Investment (d) 31.4% -6.0% 48.1% 12.9% 10.4% Payback Period in Years 2.8 Years N.A. 2.2 Years 4.3 Years 4.6 Years


(a) These estimates are based on 50% occupancy in the first year of operation, 80% occupancy in the second year, and 90% occupancy for the remaining four years. Annual rent is forecast to increase by a CPI adjustment of 1%.

(b) Operating expenses are estimated to be 25% of revenue and the capital investment reflects the cost estimate in Exhibit B.

(c) Capital Investment includes hangar repair costs of $2,000 for Option A, $1,000 for Option B, and $10,000 for Option C and D. The lower costs for Option A and B reflect work previously completed in the initial Phase I.

(d) The return on investment calculation reflects the internal rate in which the present value of future net revenues equal the initial capital investment to make the T-Hangars available for lease.

The approved FY 2014-2015 budget has $86,000 allocated for GA West Taxilane Rehabilitation. Excluding the hangar repair costs outlined in Footnote (c), the capital investment outlined in Option A – Original, B, C, and D are all within the established budget. In conclusion, the operational issues associated with Option A and financial requirements of Option A (Amended) make T-Hangars W-1 to W-8 either difficult to lease or cost prohibitive. Based on potential demand identified in the InterVISTAS study, and the extension of leases through December 31, 2020 approved at the July 2014 Board Meeting, Option B does not offer enough hangars to meet demand through 2020. While Option C offers adequate hangars to meet demand between now and December 31, 2020, the minimum site improvements associated make it less attractive than Option D, which includes adequate hangars and higher quality pavement improvements resulting in a better opportunity for return on investment. Should the Finance & Business Development Committee postpone the decision to release additional hangars, the Trustees may consider setting a targeted occupancy rate upon which staff would bring this item back for consideration. COMMITTEE COORDINATION This item is scheduled to be discussed at the September 9, 2014 Finance & Business Development Committee meeting. RECOMMENDED MOTION It is hereby recommended that the Board adopt the following motion: “It is hereby moved that the Board authorize the President/CEO to release seven (7) T-Hangars (W27-W33) located at General Aviation (GA) West at the Reno-Tahoe International Airport (RTIA) and to execute contracts to both rehabilitate and repair required pavement and T-Hangars.” MMM/twi/cj

W8W6

W4

W3W2

W1

W9 W10 W11W12 W14

W15

W16W17

W25

W24

W23

W21

W22

W20W19

W18

W33W32

W31

W30

W29

W26

W27 W28

W5

W7

X

Note: T-hangar W26 in not available as a leasable hangar due to the proximity of the fence.

#14(09)-48

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Typewritten Text

Exhibit A

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Typewritten Text

Site Improvement Desc. Unit Price Unit Quantity Total Quantity Total Quantity Total Quantity Total Quantity TotalMobilization $2,000.00 LS 2 $4,000 2 $4,000 1 $2,000 1 $2,000 1 $2,000Safety and Security $1,000.00 LS 2 $2,000 2 $2,000 1 $1,000 1 $1,000 1 $1,0008' AOA Fence $48.00 LF 0 $0 0 $0 0 $0 745 $35,760 745 $35,760Relocated 24' AOA Fence $2,500.00 LS 0 $0 0 $0 0 $0 1 $2,500 1 $2,500Ex. Fence Demolition $10.00 LD 0 $0 0 $0 0 $0 75 $750 75 $750K‐Rail Barrier $47.00 LF* 0 $0 0 $0 0 $0 260 $12,220 260 $12,2204" Aggregate Base $1.00 SF 0 $0 0 $0 0 $0 3,000 $3,000 3,000 $3,000Signs $300.00 LS 0 $0 0 $0 0 $0 2 $600 2 $600Utility Locate Services $750.00 LS 0 $0 0 $0 0 $0 1 $750 1 $750Vacuum Site $0.04 SF 0 $0 0 $0 0 $0 45,000 $1,800 0 $0Slurry Seal $1.40 SY 0 $0 0 $0 1,400 $1,960 0 $0 5,000 $7,000Paint Striping $1.00 LF 800 $800 800 $800 400 $400 880 $880 880 $880Cold Mill (2"‐3") $19.00 SY 1,483 $28,177 260 $4,940 315 $5,985 0 $0 0 $02" AC $16.00 SY 1,483 $23,728 260 $4,160 315 $5,040 0 $0 0 $0AC Reconstruction $55.00 SY 0 $0 2,750 $151,250 0 $0 0 $0 0 $0Concrete Swale $30.00 LF 0 $0 300 $9,000 0 $0 0 $0 0 $0Drainage Improvements $5,000.00 LS 0 $0 1 $5,000 0 $0 0 $0 0 $0Fog Seal $1.35 SY 1,483 $2,002 3,010 $4,064 315 $425 0 $0 0 $0Crack Sealing $1.00 LF 0 $0 0 $0 500 $500 0 $0 0 $0Subtotal $60,707 $185,214 $17,310 $61,260 $66,46020% Contingency 20% LS $12,141 $37,043 $3,462 $12,252 $13,292Hangar Repairs $2,000 $2,000 $1,000 $10,000 $10,000Total Cost $74,848 $224,256 $21,772 $83,512 $89,752

Exhibit BGA West T‐Hangar Fence and AC Maintenance Options ‐ Cost Estimates

Reno‐Tahoe International AirportJuly 2, 2014

Option CFence & Vacuum

Option DFence & Min. SlurryMill & Fill Full Length Mill & Fill Partial

Option A Option BOption A (Amended)Reconstruction

AC Reconstruction consists of: Demolition, sawcut, earthwork (export), subgrade recompaction, 8" agg base, 4" asphalt cement and fog seal.Drainage reconstruction consists of: reconstruction at existing storm drainage inlet, 12" storm drain pipe and storm drain inlet.

Plans and Construction Management shall be performed by RTAA Engineering staff except for Option A (Amended) requiring consultant design services.

(Hangars W27‐W33)

Notes: Airport Safety and Security can be reduced if project is considered landside as it was with Phase 1 reducing contractors insurance requirements. All plans, specifications and construction management shall be provided by RTAA.

Disclaimer: The unit pricing for the fencing estimates are based on the costs from the low bidder on the 2012 Landside Fencing project and are provided as Rough Order of Magnitude (ROM) for “proof of concept” planning & discussion purposes only. Unit pricing on remainder of the items are from Stantec (Cold Mill, 2" AC, Fog Seal and Crack Sealing) or costs from projects completed recently. Cost estimate does not constitute a guarantee or warranty that the Contractor's bid or negotiated prices will not vary from the budgets listed above. K‐Rail Barrier price listed is for new purchase. Price may be reduced if used barriers are available for purchase and/or if barriers are available within the RTAA's inventory.

(Hangars W27‐W33)(Hangars W1‐W8) (W1‐W3)(Hangars W1‐W8)

#14(09)-48

Date: September 3, 2014 Memo #14(09)–51 To: Chairman & Board Members For: September 11, 2014 Board Meeting From: Marily M. Mora, A.A.E., President/CEO Subject: APPROVAL OF PASSENGER FACILITY CHARGE (PFC) APPLICATION 14-

12-C-00-RNO IN THE AMOUNT OF $34,012,390 TO CONSTRUCT/ACQUIRE VARIOUS CAPITAL ASSETS FOR THE RENO-TAHOE INTERNATIONAL AIRPORT

STAFF RECOMMENDATION Staff recommends the Board authorize the President/CEO to approve the Passenger Facility Charge (PFC) Application 14-12-C-00-RNO in the amount of $34,012,390 to construct/acquire various capital assets for the Reno-Tahoe International Airport (RTIA). PURPOSE The purpose of this action is to obtain the Board of Trustees’ approval and authorization for the President/CEO to submit PFC Application 14-12-C-00-RNO (PFC #12 Application) to the Federal Aviation Administration (FAA). This action is in support the Reno-Tahoe Airport Authority (RTAA) Strategic Priority # 3 Expand Cargo Development and Service, and the Guiding Principles/Operating Practices of Operational Efficiency, Facility Development, and Safety and Security as identified in the RTAA FY 2014-2018 Comprehensive Strategic Plan. BACKGROUND The PFC is a $4.50 per enplaning revenue passenger charge collected by the airlines with $4.39 remitted back to fund projects that “preserve or enhance safety, security, or capacity of the national air transportation system”. The Integrated Explosive Detection System (ABC Project) and the Consolidated Security Checkpoint Project are examples of eligible PFC projects recently completed by the RTAA. To ensure airlines have input related to projects proposed for PFC funding, the FAA has outlined a formal airline consultation and comment process. Ultimately, the FAA reviews the application, evaluates project eligibility, and reviews stakeholder input in order to reach its decision. A 210-day PFC review and approval process is mandated in the PFC legislation, which includes the following steps:

1. The PFC approval process starts with a 30 to 45-day notice to the airlines of a consultation meeting to discuss PFC projects.

2. The RTAA holds an airline consultation meeting to explain the purpose, justification, and estimated costs of the proposed projects.

3. The airlines have 30 days to agree or disagree with the projects proposed for PFC funding. 4. Staff prepares the PFC application including responses to the airlines’ comments. 5. The FAA may then take up to 120 days to review the PFC application and issue a record of

decision. 6. Once the FAA approves the application, the airlines are given a 30-day notice to begin

collecting PFCs.


PFC 12 Application #14(09)-51 September 11, 2014 Board Meeting Page 2 of 4 As a reminder, PFC funding is to construct/acquire capital assets and cannot be used for operational expenses. DISCUSSION The PFC #12 consultation package was sent to the airlines on July 7, 2014 and a meeting was held on August 7, 2014. For airline representatives unable to attend the meeting in person, a conference call number was provided to enable full participation. A notice of the PFC #12 Application was also published in the Reno Gazette-Journal on August 15, 2014. The RTAA is now at Step 4 in the PFC process mentioned above. The proposed projects to be funded by the PFC #12 Application are listed below:

1. Airport Communications Center System (ACCS) Replacement – $1,495,800 The ACCS serves to dispatch Security, Police, Fire, Operations, and Maintenance personnel. This project will provide for the design, acquisition, and installation of replacement equipment and updated technology. The center currently hosts a variety of aging systems and obsolete technologies including: telephone, two-way radio, fire alarm monitoring, security access and control, video surveillance, criminal justice and flight information, paging, and emergency notification management reporting systems. The project will consist of two phases: Planning and Construction. The planning phase will involve the use of an integrator to conduct needs analysis, design, and bid preparation activities, as well as provide guidance through the acquisition process. The construction phase will involve the installation, testing, and training necessary to implement the new technologies, as well as contract project management and quality control and assurance services.

2. Digital Radio Equipment and Accessories – $1,526,440

This project will involve the purchase of thirty-four (34) vehicle and one hundred and sixty-five (165) hand held radios for use by airport operations, security, law enforcement, airfield rescue and firefighting, maintenance, and other support areas. With all Nevada public agencies transitioning to equipment established with Internet Protocol (IP), which is the principal standard used for communication on the Internet, this equipment will be able to communicate with federal, state and local public safety agencies. In addition, four (4) dispatch consoles with Internet Protocol (IP) will be needed as part of this project. Finally, this project includes the purchase and installation of four (4) bi-directional amplifiers (BDA) to be installed in the terminal building due to low radio transmission signal strength throughout the terminal building.

3. Flight Information Display/Visual Paging Upgrade – $1,266,750

This project provides for the replacement of these two disparate systems with one integrated system. It also provides for the addition of visual paging functionality, a recommendation of the FAA in its recent report on disability access compliance at RTIA. The project will consist of two phases: Planning and Construction. The planning phase will involve the use of an integrator to conduct needs analysis, design, and bid preparation activities, as well as to provide guidance through the acquisition process. The construction phase will involve the

PFC 12 Application #14(09)-51 September 11, 2014 Board Meeting Page 3 of 4

installation, testing, and training necessary to implement the new technologies, as well as contract project management and quality control and assurance services.

4. Snow Removal Equipment, Phase II – $4,058,000

This project consists of the purchase of snow removal equipment required for clearing snow and ice from runways, taxiways, aprons and other pavements in the Air Operations Area (AOA) at RTIA. The new snow removal equipment will consist of one snow plow truck, one wheel loader, three self-propelled runway brooms, and one rotary snow plow. This equipment will replace old technology equipment that has reached the end of its useful service life.

5. Federal Inspection Services (FIS) Facility Improvements – $631,000

This project consists of improvements to the existing Federal Inspection Services (FIS) Facility that will modify the interior layout and function of passenger processing to be more in line with current U.S. Customs and Border Protection (CBP) Technical Design Standards, Americans with Disability Act (ADA), and American National Standards Institute (ANSI) requirements. The scope of the project includes the following: 1.) reconfiguration of the floor plan and CBP facility upgrades, 2.) electrical modifications, 3.) building systems upgrades, and 4.) upgrades to security systems.

6. Aircraft Rescue and Fire Fighting (ARFF) Quick Response Vehicle – $810,000

This project consists of replacement of Fire 2 (1994) with a Class 3 Quick Response Vehicle with Drivers Enhanced Vision System (DEVS) including power tools and accessory equipment in accordance with FAA Advisory Circular 150\5210-148 and in accordance with National Fire Protection Association (NFPA) standards. The purchase of the ARFF apparatus equipment is required for fire suppression at RTIA. The existing Fire-2 Vehicle scheduled for replacement is 20 years old

7. Southwest Cargo Aircraft Apron and Connecting Taxiway, Phase I – $24,224,000 This project is the first phase of the construction of an air cargo apron in the southwest quadrant of RTIA. This project consists of design and construction of approximately 54,000 square yards of Portland Cement Concrete (PCC) ramp and taxi-lane connector adjacent to Taxiway “A” in the southwest quadrant. The work scope includes excavation, stabilizing fill, base, PCC pavement, drainage, signage, marking and related appurtenances. Also, other improvements include infrastructure for related utilities, lighting, drainage, access, and security.

If submission of the application is approved by the Board, this formal action by the governing board of the RTAA will be included in the formal PFC application. Upon FAA approval of the PFC #12 Application, RTAA will be authorized to collect PFCs through August 31, 2020 with no gap in collections. COMMITTEE COORDINATION This PFC application is scheduled to be presented at the September 9, 2014 Finance and Business Development Committee Meeting.

PFC 12 Application #14(09)-51 September 11, 2014 Board Meeting Page 4 of 4 FISCAL IMPACT The use of PFC funds allows the RTAA to complete high priority capital projects without increasing airline rates. With the importance of increasing air service, the RTAA’s ability to keep airline rates and charges at modest levels and remain competitive with other similarly sized U.S. airports is important in attracting and retaining air service. The estimated cost of each project in this application is shown below.

Due to the costs associated with construction of the Southwest Cargo Apron, the application reflects the RTAA issuing debt of approximately $12.519 million to fund this project. Using a ten (10) year repayment period at an estimated annual interest rate of 4.5%, the annual debt service, which will be paid solely by PFC revenues, is forecasted to be approximately $1.92 million annually As of June 30, 2014, the RTAA has on deposit PFC funds of approximately $5.9 million with annual collections of approximately $6.5 million. RECOMMENDATION It is hereby recommended that the Board adopt the following motion: Authorize the President/CEO to submit the Passenger Facility Charge (PFC) Application 14-12-C-00-RNO in the amount of $34,012,390 to the FAA to construct/acquire various capital assets for the Reno-Tahoe International Airport and authorize the President/CEO or her designee to sign. MMM/aro/cj

PFCLevel Pay-as-you-go Bond Capital Financing Total PFC

1Airport Communications Center System Replacement

$4.50 $ 1,495,800 -$ -$ 1,495,800$

2 Digital Radio Equipment and Accessories $4.50 $ 1,526,440 -$ -$ 1,526,440$

3Flight Information Display/Visual Paging Upgrade

$4.50 $ 1,266,750 -$ -$ 1,266,750$

4 Snow Removal Equipment, Phase II $4.50 $ 4,058,000 -$ -$ 4,058,000$

5Federal Inspection Services Facility Improvements

$4.50 $ 631,000 -$ -$ 631,000$

6 ARFF Quick Response Vehicle $4.50 $ 810,000 -$ -$ 810,000$

7Southwest Cargo Aircraft Apron & Connecting Taxiway, Phase 1

$4.50 $ 5,000,000 12,519,400$ 6,705,000$ 24,224,400$

Notice Total: $14,787,990 $12,519,400 $6,705,000 34,012,390$

PFC Revenue RequestedPrj No. Project Title

Administrative Report Reno-Tahoe Airport Authority

Date: September 3, 2014 Administrative Report #55-14 To: Chairman & Board Members From: Marily M. Mora, A.A.E., President/CEO Subject: CONSUMER PRICE INDEX UTILIZATION FOR ANNUAL T-HANGAR RENT

RATE ADJUSTMENTS AT THE RENO-TAHOE INTERNATIONAL AIRPORT AND RENO-STEAD AIRPORT PRESENTATION TO THE FINANCE AND BUSINESS DEVELOPMENT COMMITTEE (AGENDA ITEM VI - A)

Staff will present an overview of the Consumer Price Index (CPI) Utilization for Annual T-Hangar Rent Rate Adjustments at the Reno-Tahoe International Airport and Reno-Stead Airport to the Finance and Business Development Committee (see Agenda Item VI – A). The overview will include its intent and application to real estate leases, Federal Aviation Administration Grant Assurances regarding uses of revenues, airport fees and rental structures, and goals of financial stability. Staff will also present an overview on Reno-Tahoe Airport Authority’s current leases subject to CPI rent adjustments at both the Reno-Tahoe International Airport and the Reno-Stead Airport, as well as provide a historical perspective of T-Hangar lease rates, rate setting methodologies and rent adjustments.

1


Date: September 3, 2014 Administrative Report #56-14 To: Chairman & Board Members From: Marily M. Mora, A.A.E., President/CEO Subject: FINANCIAL REPORTING PACKAGE – JULY 2014 EXECUTIVE SUMMARY Attached is the Fiscal Year 2014-15 Financial Reporting Package for the month of July, 2014. With the start of the new fiscal year, the current month and year-to-date columns will be the same for this month only. The budget amounts mentioned below assume one twelfth of the revenue budget is received and one twelfth of the operating expense budget is spent each month. This approach in the early months of the new fiscal year typically results in above budget operating revenues due to high summer passenger traffic in the months of July and August. These seasonal factors are typically offset within four months once summer is over and lower passenger traffic typical of the fall months of September and October are incorporated into the year-to-date results. Based on actual results through July 31, 2014, net available cash flow, after funding debt service, is approximately $989,000, an increase of approximately $735,000 above the adopted FY 2014-15 Budget and $98,000 below last year.

Y E A R T O D A T E as of July 31, 2014 (In Thousands)8.3% Of Fiscal Year

CURRENT PRIOR Y-T-DYEAR YEAR VARIANCE % BUDGET VARIANCE %

Operating Revenue Airline 1,327$ 1,258$ 69$ 5.5% 1,248$ 79$ 6.3% Non-Airline 2,770 2,699 70 2.6% 2,396 374 15.6%

Total Operating Revenue 4,097 3,957 139 3.5% 3,644 453 12.4%

Non-Operating Revenues 177 179 (2) -1.1% 139 37 26.8%

Total Revenue 4,273 4,136 137 3.3% 3,783 490 13.0%

Operating Expenses (2,969) (2,650) (319) 12.1% (3,214) 245 -7.6%

Net Revenue Available for Debt Service 1,304 1,486 (182) -12.2% 569 735 129.1%

Debt Service After PFCs (315) (399) 83 -20.9% (315) 0 0.0%

Net Available Cashflow 989 1,087 (98) -9.1% 254 735 289.6%

July 2014 Financial Summary Administrative Report #56-14 September 3, 2014 Page 2 of 15

2

TOTAL REVENUE The Authority’s total operating revenue of $4.097 million is approximately $453,000 or 12.4% above budget due to higher airline revenues of approximately $78,500 and higher non-airline revenues of $374,200, which primarily reflects higher auto rental and public parking revenues. The Authority’s revenue results are discussed in more detail later in this report. The chart below reflects actual operating revenues for the fiscal year as compared to the budget amount.

AIRLINE Landing Fees The RTAA executed a five-year agreement with the airlines effective July 1, 2010. The formula for calculating landing fees consists of almost 100% cost recovery of airfield related operating and capital improvement expenses offset by other airfield derived revenues.


3

Landing fees are budgeted and currently being collected at $2.93 per 1,000 lbs. of landed weight. For the month of July 2014, landing fee revenues registered $639,200, which is approximately $49,500 or 8.4% above the adopted budget. This increase is due primarily to seasonal summer factors with landed weight 6.8% above the adopted budget. The costs allocated to the Airfield Cost Center, or Net Requirement per the Airline Agreement, are 10.4% under budget based on July, 2014 activity. Airline Terminal Rents Airline terminal rents reflect cost recovery of terminal costs allocated to airline occupied facilities (commercial compensatory basis) with total facility costs divided by rentable terminal square footage. For the month of July 2014, airline terminal rental revenue registered $687,700, which is approximately $29,000 or 4.4% above budget. The budgeted average signatory rental rate is $62.45 per sq. ft. per annum. The costs allocated to the Terminal Building Cost Center, or Net Requirement, are 2.8% under budget based on actual results through July, 2014. NON-AIRLINE REVENUE With airline revenues derived from cost recovery formulas and no net profit resulting directly from their operations, non-airline revenues are critical for the Authority to meet other operating costs and to generate internal funds for equipment and capital projects that do not directly benefit the airlines. Non-airline operating revenues are primarily comprised of terminal and rental car concession revenues, public parking revenue, building/land rent, and reimbursement of Authority provided services. Overall, non-airline operating revenues registered $2.770 million. This represents an increase of approximately $374,200 or 15.6% over budget. The increase is primarily due to $227,400 in higher than budgeted revenue from auto rental concessions. In addition, the Authority received $55,000 in higher parking revenues and $41,000 in higher gaming concession revenues. Non-airline revenues have increased 2.6% from the same period of FY 2013-14 mainly due to the higher revenues in auto parking and auto rental operations. Enplaned passenger traffic for the first month of FY 2014-15 is 162,090, a decrease of 1.9% below last year and an increase of 16.7% above the straight-line budget. Further detail on passenger traffic results is provided in the Key Benchmarks section of this summary.


4

NON-OPERATING REVENUE Non-Operating revenues of approximately $176,700, which are primarily comprised of interest income, aviation fuel tax, and rental car customer facility charges, are approximately $37,300 or 26.8% above budget. OPERATING EXPENSES Operating expenses for the month of July 2014 are 7.6% or approximately $244,700 below budget. The savings include approximately $22,000 in lower than budgeted Personnel costs, $152,600 in lower Purchased Services, $30,500 in lower Materials and Supplies and $41,700 in lower Administrative Expenses. The chart below is based on the actual operating expenses for July 2014 as compared to the year-to-date budget amount.


5

DEBT SERVICE Net debt service payments, after the application of Passenger Facility Charges, of approximately $315,400 match the FY 2014-15 adopted budget forecast. KEY BENCHMARKS The following are key benchmarks and ratios used to measure financial activities and monitor the financial health and condition of the Authority:

Enplaned Passengers Passenger Activity is a significant factor driving non-airline revenues such as terminal concessions, public parking, and gaming. For the month of July, 2014, enplaned passengers were 162,090, a 16.7% increase compared to the budgeted annual passenger traffic of 1,667,290 divided by 12 months. This result is 1.9% below passenger traffic levels posted last year for the same period. The significantly higher passenger traffic as compared to the straight line budget reflects high summer passenger traffic in the months of July and August. These seasonal factors are typically offset within four months once summer is over and lower passenger traffic typical of the fall months of September and October are incorporated into the year-to-date results The July 2014 Flight Schedule at the Reno-Tahoe International Airport (RNO) provided 62 peak nonstop departures to 15 destinations with 198,910 total scheduled departing seats. This represents a 1.6% increase from the July 2013 flight schedule of 61 peak daily departures to 15 destinations. The flight increase can be attributed to American Airlines, Alaska Airlines and U.S. Airways adding flights into the summer schedule.

Y E A R T O D A T E (July 31, 2014 )8.3% Of Fiscal Year

CURRENT PRIOR Y-T-DKey Statistics / Benchmarks YEAR YEAR VARIANCE % BUDGET VARIANCE %

Enplaned Passengers 162,090 165,268 (3,178) -1.9% 138,941 23,149 16.7% Airline Cost Per Enplaned Passenger 6.61$ 7.56$ (0.95)$ -12.5% 8.15$ (1.54) -18.9% Non-Airline Revenues per EPAX (a) 15.91$ 15.05$ 0.86$ 5.7% 15.97$ (0.06) -0.4% Operating Ratio 72.5% 67.0% 5.5% 8.2% 88.2% -15.7% -17.8% Debt Service Coverage Ratio 3.02 3.04 (0.02) -0.6% 1.48 1.54 104.3% Days Cash On Hand 385.3 438.8 (53.6) -12.2% 344.3 40.9 11.9%

(a) Excludes cost reimbursement for the Baggage Handing System (BHS) paid by the airlines.


6

Despite the increase in flights, lower passenger traffic was primarily due to Southwest Airlines carrying approximately 12,800 fewer enplaned passengers in the current fiscal year than last year. This reduction was due to the termination of non-stop service to Portland and Seattle. Partially offsetting this decrease are increases registered by Alaska, American and US Airways of approximately 4,200 combined total enplaned passengers. A table and chart enclosed in this package provides a comparison of enplaned passenger traffic and market share by airlines for the 2014-15 fiscal year as compared to previous year’s results. Airline Cost per Enplaned Passenger This ratio represents airline payments for use of airport facilities (landing fees and terminal rents) in accordance with adopted rates and charges methodology as outlined in the lease agreement between the airport and airlines. The Authority targets to maintain a reasonable cost structure for the airlines to attract and maintain air service to our community. Due to operating expenses being 7.6% below budget, the airline cost per enplaned passenger is estimated to be $6.61 as compared to budgeted cost per enplaned passenger of $8.15. The preliminary airline cost per enplaned passenger for FY 2013-14 is estimated to be $7.56. Non-Airline Revenue per Enplaned Passenger This ratio represents operating revenues derived from sources other than the airlines divided by enplaned passengers for the fiscal year. This financial ratio measures the Authority’s ability to generate terminal and rental car concession fees, public parking, land and building rents from non-airline facilities, interest income, and aviation fuel tax at both the Reno-Tahoe and the Reno-Stead airports. Revenues under this calculation exclude cost recovery collected from the airlines for use of the baggage handling system. For the month of July, 2014, non-airline revenue per enplaned passenger registered $15.91, an increase of 5.7% from the $15.05 registered in the prior year and 0.4% below the FY 2014-15 Budget of $15.97. These results primarily reflect a general increase in sales per transaction in the two largest non-airline revenue sources (rental car concession and public parking) as compared to last year. In addition, concession revenues derived from gaming per passenger are also higher for the month of July, 2014. Advertising and merchandise revenues in July 2014 registered lower sales per passenger compared to last year and the adopted FY 2014-15 Budget.


7

A detailed table enclosed in this package provides a comparison of non-airline revenues by source as compared to the adopted budget and the previous year results. Operating Ratio The Operating Ratio is calculated by taking operating and maintenance expenses and dividing by total operating revenues. This ratio indicates whether that level of operating expense as a proportion of operating revenues are consistent and tracking with the approved expenditures and revenues adopted in the FY 2014-15 Budget. Generally, a lower ratio of expenses to revenues is positive since it reflects an improvement in the net operating revenue available to pay debt service and generate additional cash flow. For the month ending July 31 2014, the ratio favorably registered 72.5% as compared to the adopted budget ratio of 88.2%. This result reflects both significantly higher revenues and lower operating expenses for the first month of the fiscal year. Days Cash on Hand Days Cash on Hand is calculated by identifying unrestricted cash and investments divided by annual operating and maintenance expenditures multiplied by 365 days. The Authority’s cash and liquidity position is very strong with 385 days of unrestricted cash on hand to meet the Authority’s operating and maintenance requirements. This compares to the year-end budget estimate of 344 days. The median average for airports nationwide in 2012 according to Moody’s Investor Services was 522. Per the rating agencies, a ratio lower than 300 days significantly increases the likelihood of a ratings downgrade. A chart enclosed in this package provides a comparison of liquidity balances and Days Cash on Hand as of July 31, 2014 compared to FY 2013-14 year-end results and forecasted year-end cash balances in the adopted FY 2014-15 Budget. Debt Service Coverage Ratio The Debt Service Coverage Ratio is the net revenue available for debt service (Operating Revenue less Operating Expenses) divided by annual debt service. This benchmark measures the ability of the Authority’s operations to generate sufficient funds to pay the annual debt service on both the senior lien bonds and the subordinate notes. The Authority targets to maintain net revenue after operating expenses equal to or greater than 1.5 times annual debt service. Under the bond indenture, the Authority is required to maintain at least a ratio of 1.25.


8

The Authority’s debt service coverage ratio of 3.02X is strong with lender and bond holder protection higher than the FY 2014-15 Budget estimate of 1.48X and significantly above the minimum level of 1.25X established under the Authority’s Master Bond Indenture. This ratio is significantly above budget due to significantly higher operating revenues by $452,800 or 12.4% and lower operating expenses by $244,800 or 7.6% as outlined above. The senior lien debt was issued to fund construction of the Parking Garage and the connector bridge. Public parking revenues are assigned to the payment of this debt. No debt service for either the Senior Bonds or the Subordinate Lien Notes is included in the cost recovery assigned to Airline Cost Centers. A table and chart are included in this package to outline the financial inputs used to calculate this ratio for July 2014 as compared to the same period last year and the Adopted FY 2014-15 Budget.


Date: September 3, 2014 Administrative Report #57-14 To: Chairman & Board Members From: Marily M. Mora, A.A.E., President/CEO Subject: Administrative Award of Contracts Pursuant to Resolution No. 462 for

the Month of August 2014 BACKGROUND At the January 19, 2006 meeting of the Board of Trustees of the Reno-Tahoe Airport Authority, the Board approved Resolution No. 462 authorizing the President/CEO to award contracts for budgeted goods, services (other than professional service agreements exceeding $50,000), materials, and supplies when the estimated amount to perform the contract is $100,000 or less, approve a contract change order (CO) on construction projects where the total net cost of a single change order does not increase the contract sum by more than $100,000, contract for a professional service agreement (PSA) when the estimated amount to perform the work is $50,000 or less, and approve an amendment to a professional service agreement where the total net cost of a single amendment does not increase the agreement amount by more than $50,000. DISCUSSION Resolution No. 462 requires that the President/CEO provide the Board of Trustees with an administrative report setting forth a list of contracts, professional service agreements, change orders, and amendments approved administratively as a result of the resolution to be given to the Board on a monthly basis. Appended hereto is the list for the month of August 2014. MMM/jah/cj

AUGUST 2014

Date Name of Company Dollar Amount Description Funding Source Department/Division

7/25/14 Sierra Nevada Construction

No Cost CO#1 to Landside Pavement Repair and Rehabilitation, Phase 7, contract to adjust the contractual retainage from 10% to 5% and to reduce retainage at the 50% mark of the project from 5% to 2.5% per Nevada Revised Statute (NRS) 338.51.

FY 2014-15 Capital Projects Landside Pavement Maintenance

Engineering and Construction

8/6/14 Sierra Environmental Monitoring, Inc.

$16,878 PSA for the performance of recommended storm water discharge sampling as a means of evaluating the effectiveness of the RTAA’s Storm Water Pollution Prevention Plan. Sample collection and analysis will be collected from two storm events between August 2014 and June 2015.

FY 2014-15 O&M Planning and Environmental Services

8/11/14 Robert E. Firth, Water Resource Consultant

$4,000 PSA for the provision of recommended “on-call” water rights consulting services to include water permitting, updating water rights reports, and special projects pertaining to water rights.

FY 2014-15 O&M Planning and Environmental Services

8/14/14 KAP Construction $1,350 CO#1 to Traffic Barriers Project to encase several abandoned oil tank supply lines, uncovered during excavation, in PVC sleeves and to continue with re-bar placement and concrete.

FY 2014-15 Capital Projects

Facilities and Maintenance

#57-14

AUGUST 2014

Date Name of Company Dollar Amount Description Funding Source Department/Division

8/15/14 Airport Concession Consultants

$22,750 PSA for consulting services to assist the RTAA in meeting FAA Regulation 49 Parts 26 (Construction) and 23 (Concessions) in establishing and maintaining a Disadvantaged Business Enterprise (DBE) and Airport Concession Disadvantaged Business Enterprise (ACDBE) program relevant to federally-funded contracts and airport concessions

O&M and FAA construction grants

Economic Development

8/15/14 Paul Cavin Architect LLC

$12,800 PSA for conducting design services for the Federal Inspection Services Facility Improvements – Phase 1 Project. Consultant will analyze existing conditions of facility and programmatic plans and coordinate to develop approved construction documents.

FY 2014-15 General Purpose Fund

Engineering and Construction

8/15/14 Potter Industries $20,075 Blanket PO 5990 for procurement of retro reflective glass beads on an as ordered as needed basis. This contract results from a formal bid solicitation.*

FY 2014-15 O&M Airfield Maintenance

Key to abbreviations: PO = Purchase Order CO = Change Order PSA = Professional Service Agreement PFC = Passenger Facility Charge Program AIP = Airport Improvement Project *Contract signed by authorized designee – Executive Vice President/COO #57-14


Date: September 3, 2014 Administrative Report #58-14 To: Chairman & Board Members From: Marily M. Mora, A.A.E., President/CEO Subject: FY 2014-2015 GENERAL COUNSEL’S BUDGET The following is a summary of the General Counsel’s budget for the first month of the 2014-2015 fiscal year. The summary shows the amounts “budgeted’’ compared to “actual” by the major account classifications. While July represents 8% of the budget year, actual costs are 7.1% of the total budget.

Account Classification YTD Actual

YTD Budget

Over (Under) Budget

% Variance

2014-15 Annual Budget

% of Annual Budget

Purchased Services Fennemore Craig Jones Vargas $ 28,223 $ 29,000 $ (777) -2.7% $ 348,000 8.1%

Specialty Area, Legal 1,619 4,333 (2,714) -62.7% 52,000 3.1% Other Purchased Services 0 1,271 (1,271) -100.0% 15,250 0.0% Administrative Expense

Books & Subscriptions 0 50 (50) -100.0% 600 0.0% Conference Registration 0 142 (142) -100.0% 1,700 0.0% Travel Expense

0 167 (167) -100.0% 2,000 0.0%

Total General Counsel $ 29,842 $ 34,963 $ (5,121) -14.6% $ 419,550 7.1% MMM/lw/cj


Date: September 3, 2014 Administrative Report #59-14 To: Chairman & Board Members From: Marily M. Mora, A.A.E., President/CEO Subject: FY 2014-2015 BOARD OF TRUSTEE’S BUDGET The following is a summary of the Board of Trustee’s budget for the first month of the 2014-2015 fiscal year. The summary shows the amounts “budgeted’’ compared to “actual” by the major account classifications. While July represents 8% of the budget year, actual costs are 4.8% of the total budget.


YTD Budget

Over (Under) Budget

% Variance


% of Annual Budget

Personnel Services Trustee Stipend $ 5,040 $ 5,040 $ 0 0% $ 60,480 8.3% Personnel Services 1,007 3,800 (2,793) -75.3% 45,600 2.2% Purchased Services 444 208 236 113.2% 2,500 17.8% Materials and Supplies 146 246 (100) -40.5% 2,950 5.0% Administrative Expense Membership Dues 0 42 (42) -100.0% 500 0.0%

Conference Registration & Training 0 467 (467) -100.0% 5,600 0.0%

Meeting Expenses 0 833 (833) -100.0% 10,000 0.0% Travel and Reimbursed Expense 0 833 (833) -100.0% 10,000 0.0%

Total Board $ 6,637 $ 11,469 $ (4,831) -42.1% $ 137,630 4.8%

MMM/lw/cj


Date: September 3, 2014 Administrative Report #60-14 To: Chairman & Board Members From: Marily M. Mora, A.A.E., President/CEO Subject: FY 2014-2015 LEGISLATIVE CONSULTANT’S BUDGET The following is a summary of the Legislative consultant’s budget for the first month of the 2014-2015 fiscal year. The summary shows the amounts “budgeted’’ compared to “actual” by the major account classifications. While July represents 8% of the budget year, actual costs are 7.8% of the total budget.


YTD Budget

Over (Under) Budget

% Variance


% of Annual Budget

State and Local Governmental Relations $ 6,186 $ 6,250 $ (64) -1.0% $ 75,000 8.2% Legislative Consultant Washington, D.C. 7,000 7,917 (917) -11.6% 95,000 7.4%

Total Governmental Relations $ 13,186 $ 14,167 $ (981) -6.9% $ 170,000 7.8% MMM/lw/cj


Date: September 3, 2014 Administrative Report #61-14 To: Chairman & Board Members From: Marily M. Mora, A.A.E., President/CEO Subject: HANGAR LEASE EXECUTION STATUS BACKGROUND Resolution No. 502, authorizes the President/CEO to approve and execute Reno-Tahoe Airport Authority (Authority) General Aviation (GA) aircraft hangar lease agreements where the estimated total revenue amount is $100,000 or less over the hangar lease term, including any extension year. This Resolution further requires that the President/CEO provide the Board of Trustees with an Administrative Report setting forth a list of hangar lease agreements executed as a result of this Resolution. This Administrative Report shall be given to the Board on a monthly basis. At the May 17, 2012 meeting of the Board of Trustees, the Board approved the phased release of twenty-three (23) additional T-Hangars at GA West, based on market demand, ultimately bringing the total GA West inventory to thirty-one (31) T-Hangars. In the first release phase, eight (8) additional T-Hangars were made available for lease. Effective October 18, 2012, the Reno-Tahoe Airport Authority transferred the management of the T-Hangars to the Reno-Tahoe International Airport’s (RNO) Fixed Base Operator, Atlantic Aviation, which is now the point of contact for the RNO T-Hangar tenants, including leasing, maintenance and repair, and fueling services. Atlantic Aviation is responsible for management and marketing of the vacant T-Hangars at both GA West and GA East. At the February 14, 2013 Board meeting, the Board voted to waive the monthly $102 Pavement Rehabilitation Fee previously approved for all GA West T-Hangar tenants. This became effective March 1, 2013. The Board further agreed to place a hold on additional expenditures for Pavement Rehabilitation until demand is evident. At the March 2014 meeting of the Board of Trustees, the Board voted to table the release of an additional eight (8) GA West T-Hangars and supporting capital improvements to explore alternative release and improvement options. At the July 2014 Board meeting, staff brought options forward and recommended the release of seven (7) GA West T-Hangars. The Board voted to table the release and associated capital improvements until the occupancy rate of the existing available T-Hangars was higher.

Hangar Lease Execution Status September 2014 #61-14 Page 2 of 2

2

LEASING STATUS: T-HANGARS As of September 1, 2014, a total of fourteen (14) T-Hangars at GA West are leased and two (2) are currently available for lease. The release of the remaining fifteen (15) T-Hangars will be made available pending direction from the Board. To date, fifty (50) T-Hangars at GA East are leased and seven (7) are available for lease. T-Hangar E09 at GA East has a hangar door functionality issue. Staff is working to get an estimate for repair/replacement. In summary, of the eighty-eight (88) T-Hangars owned by the Authority located at both the East and West General Aviation facilities: sixty-four (64) T-Hangars are currently leased, nine (9) are vacant and fifteen (15) are pending Board release. The table below shows aircraft T-Hangar leasing and vacancy status as of September 1, 2014.

Airport Location Occupied Vacant Available

Pending Board Directive

Total T-Hangars (East

& West)

General Aviation West 14 2 15 31

General Aviation East 50 7 n/a 57

Total T-Hangars 64 9 15 88

LEASING STATUS: COMMERCIAL & BOX HANGARS Atlantic Aviation and Airport Authority staff continue to market and show the facilities to prospective GA tenants. A new marketing program for the current T-Hangar inventory is being implemented. Vacant RNO T-Hangars are listed on the Hangar Trader and Hangar Network internet based websites. A direct mail campaign and signage are in the development process. Airport Authority staff continue to administer box and commercial hangar leases. GA West inventory consists of five (5) box/commercial hangars and one (1) Fixed Base Operator (FBO) office. Hangar 10 is the only vacant facility at GA West; however, the RTAA is currently in negotiations with a perspective new tenant. That new lease should be completed within the next 30 days. GA East inventory consists of one (1) FBO office and six (6) box/commercial aircraft hangars. The FBO East office will be offered for lease as part of the T-Hangar Management RFQ. All commercial/box hangars are leased at GA East. MMM/km/cj

RNO HANGAR LEASES STATUS REPORT – SEPTEMBER 1, 2014

#61-14 1

Commencement Date

Name of Tenant/Company Hangar Number Description Status Annual Value of Agreement

7/1/12 Padal, Inc. E01 T-Hangar East A $7,515 7/1/12 Mowbray Aviation E02 T-Hangar East A $7,515 2/1/13 Richmond, Richard E03 T-Hangar East A $7,515

12/10/12 Martin, James E04 T-Hangar East A $7,515 7/1/12 Reno Flying Service E05 T-Hangar East A $7,515 2/1/14 Reno Flying Service E06 T-Hangar East A $7,515 7/1/12 Vientos, LLC & Online Aerial Photo E07 T-Hangar East A $7,515 7/1/12 N9841X, LLC – Martin, Lyle E08 T-Hangar East A $7,515

VACANT – Door Replacement E09 T-Hangar East V 8/1/14* Parsons, John E10 T-Hangar East A $11,150 7/1/12 Tahoe Aviation E11 T-Hangar East A $7,515

VACANT E12 T-Hangar East V 7/1/12 Hoskins, Anthony & Berger Joyce E13 T-Hangar East A $7,515 7/1/12 FiveMikeCharlie, Inc E14 T-Hangar East A $7,515 12/1/13 333 Ranch, LLC (Jim Boyer) E15 T-Hangar East A $7,515 7/1/12 SJR Properties E16 T-Hangar East A $7,515 7/5/13 Karsten Iverson E17 T-Hangar East A $7,515 2/13/13 O’Neal Management Group, LLC E18 T-Hangar East A $10,110 7/1/12 Petty, Bob & O’Connor, Michael E19 T-Hangar East A $7,059 7/1/12 Dillon, Ken E20 T-Hangar East A $7,059 7/1/12 Nash, Jeffrey E21 T-Hangar East A $7,059 9/1/12 Plecha, Stanley E22 T-Hangar East A $7,059 7/1/12 Gold Digger Enterprises E23 T-Hangar East A $7,059

VACANT E24 T-Hangar East V 7/1/12 Air 340 LLC E25 T-Hangar West A $7,059

VACANT E26 T-Hangar East V 9/1/14* Harwin, Ed E27 T-Hangar East A $7,059 7/1/12 Davis, Richard/Mike Bussio E28 T-Hangar East A $7,059 7/1/12 Bryce Herndon E29 T-Hangar East A $7,059 7/1/12 Zubillaga, Phil E30 T-Hangar East A $7,765 7/1/12 Gunderson, Mark E31 T-Hangar East A $7,059


#61-14 2

Commencement Date


7/1/12 Korhonen, Aki E32 T-Hangar East A $7,059 7/1/12 Jochco Investments, LLC E33 T-Hangar East A $7,059 7/1/12 Advantage Flight Solutions E34 T-Hangar East A $7,059 7/1/12 Scolari, Joey E35 T-Hangar East A $7,059

VACANT E36 T-Hangar East V 11/1/12 Goode, Randall E37 T-Hangar East A $5,070 7/1/12 The Kaigan Corporation E38 T-Hangar East A $5,070 7/1/12 Buck, David E39 T-Hangar East A $5,468 7/1/12 Pezonella, Raymond E40 T-Hangar East A $5,070 7/1/12 Delta Victor Resources E41 T-Hangar West A $5,070 7/1/12 Baker, Gary E42 T-Hangar East A $5,070 7/1/12 Sweet, Kent E43 T-Hangar East A $5,070 7/1/12 Heinrich, Rolf & Gisler, Ron E44 T-Hangar East A $5,070 2/11/13 Aussieyank Air,LLC E45 T-Hangar East A $5,070 8/9/13 Silverado Land Management E46 T-Hangar East A $5,070

VACANT E47 T-Hangar East V 9/1/13 Cirrus Air, LLC E48 T-Hangar East A $5,070 7/1/12 Civil Air Patrol E49 T-Hangar East A $5,070 7/1/12 Civil Air Patrol E50 T-Hangar East A $5,070 7/1/12 Riley, James E51 T-Hangar East A $5,070 3/1/14 Starr-Ski, LLC E52 T-Hangar East A $5,070

VACANT E53 T-Hangar East V 7/1/12 November Papa- Hegge, Thomas E54 T-Hangar East A $5,070 7/1/12 Pokey Airlines E55 T-Hangar East A $5,070 3/01/14 Spalding Fly, LLC E56 T-Hangar East A $5,070 7/1/13 Mowbray, Jerry E57 T-Hangar East A $5,070 7/1/12 LVR (Dermody) Hangar F1 Box Hangar East A $36,590 7/31/12 Boardroom Aviation Hangar F2 Box Hangar East A $31,897 12/20/10 Sierra NV Holdings/Heli 1 Hangar F3 Box Hangar East A $29,903 7/1/12 Reno Flying Service Hangar B Box Hangar East A $87,033 2/1/14 Reno Flying Service-American Medflight Hangar E Box Hangar East A $18,690


#61-14 3

Commencement Date


7/1/12 Deeside Trading Hangar G Box Hangar East A $48,000 5/1/13 VACANT FBO Office FBO Office East V 7/1/14 Whisper Jet, Inc. FBO Office FBO Office West A $78,654 7/1/14 Whisper Jet, Inc. Hangar 2 Box Hangar West A 7/1/12 Caymus Vineyards Hangar 7 Box Hangar West A $23,923 2/1/14 Charles Chi Hangar 8 Box Hangar West A $20,653

11/29/10 Western Jet Hangar 9 Box Hangar West A $139,500 Pending – 09/14 VACANT – Pending Five-Year Lease Hangar 10 Box Hangar West P $90,000

NOT RELEASED W01 T-Hangar West NA NOT RELEASED W02 T-Hangar West NA NOT RELEASED W03 T-Hangar West NA NOT RELEASED W04 T-Hangar West NA NOT RELEASED W05 T-Hangar West NA NOT RELEASED W06 T-Hangar West NA NOT RELEASED W07 T-Hangar West NA NOT RELEASED W08 T-Hangar West NA

7/1/12 Robertson Consulting W09 T-Hangar West A $8,304 VACANT W10 T-Hangar West V

3/21/14 Parsons, John W11 T-Hangar West A $5,614 3/1/14 Global Distillation Services, LLC W12 T-Hangar West A $5,614

VACANT W Heli Hangar Helicopter Hangar West V VACANT W14 T-Hangar West V

9/1/12 Intermountain Traffic, LLC W15 T-Hangar West A $5,614 9/1/12 Howitt, John W16 T-Hangar West A $5,614 7/1/12 Elliot, Mike W17 T-Hangar West A $6,052 7/1/12 C&J of Nevada W18 T-Hangar West A $4,713 8/1/12 Aero Investors, LLC W19 T-Hangar West A $4,713 9/1/13 Prioreschi, Gordon W20 T-Hangar West A $4,713 9/1/13 Cherokee Six, LLC W21 T-Hangar West A $4,713 9/1/13 Salinger, David W22 T-Hangar West A $4,713 9/11/12 Travis, Craig W23 T-Hangar West A $4,713


#61-14 4

Commencement Date


7/1/12 Garman, Jon W24 T-Hangar West A $4,713 8/1/14 78 Lance LLC W25 T-Hangar West A $4,713

NOT AVAILABLE FOR LEASE W26 T-Hangar West NA NOT RELEASED W27 T-Hangar West NA NOT RELEASED W28 T-Hangar West NA NOT RELEASED W29 T-Hangar West NA NOT RELEASED W30 T-Hangar West NA NOT RELEASED W31 T-Hangar West NA NOT RELEASED W32 T-Hangar West NA NOT RELEASED W33 T-Hangar West NA

A = Active Agreement HSC = Hangar Square Footage Change P = Pending Agreement V= Vacant T = Terminated Agreement New Activity for the Month RE = Relocated Tenant * New RNO T-Hangar Tenant NA = Not Available for Lease

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