Charles M Schulz ndash Sonoma County Airport Status Report for the Board of Supervisors

February 9 2016

Summary Purpose is to outline the Airports five year needs for

development construction and staffing bull Airport BackgroundGovernanceUpdates bull Airline Industry Overview bull Airport Developments

bull Proposed Capital Improvement Projects bull Financial Analysis

bull Airline Rates and Charges bull Proposed Funding Options

bull Staffing and Aircraft Rescue and Firefighting (ARFF) Analysis

Airport Governance Board of

Supervisors

Transportation and Public Works

Charles M Schulz ndash Sonoma County Airport

Aviation Commission

bull Advisory Only bull Guides Policy

Airport Land Use Commission

bull Compatible land use planning around Airport

bull Does not govern on Airport land uses

Federal Aviation Administration

bull Grant Assurances bull Advisory Circulars bull Operating Certificate bull Master Plan bull Airport Layout Plan bull Land Use bull Navigational Aids bull Air Traffic Control bull Grants

US Department of Transportation

bull American with Disabilities Act bull Civil Rights Act bull Passenger Rights

Caltrans

bull Airport Permit bull Airport Loan Program

Transportation Security Administration (TSA)

bull Airport Security bull Badging Requirements bull Airline Security bull Threat Assessments

Airport Background The County of Sonoma purchased the land for the Airport in 1939 and

opened in 1941

The Airport was used as a US Army base from 1942 to 1946 the Airport was enlarged to include the first hangars and the second runway

The Airport encompasses approximately 1200 acres

The Airport had air service between 1947 to 2001 returning in 2007 with Horizon Air providing flights to Los Angeles and Seattle

Since 2007 Horizon AirAlaska has carried over 18 million passengers

The Board approved the Airportrsquos Master Plan in January 2012

Estimating 81000 annual flight operations (take off or landings) at STS in 2015 - airline (5) and general aviation (95) flights

There are 385 aircraft based at STS

The tenants of the Airport generate over $15 million in possessory taxes annually

4 non-profit operators (PCAM EAA CAFEacute 99rsquos) at the Airport

29 volunteer ambassadors 6 of which work alongside therapy dogs

Current Organizational Chart The Airport has 15 employees on staff

8 operations 5 administrative and 2 managers

Airport Enterprise Fund The Airport is an enterprise fund and receives no General Fund contribution

The two largest revenue generators for the Airport are bull Hangar rental income is over $14 million annually bull Parking lots generating over $1 million in fees in 2015

29 based businesses (with approximately 250 based employees) including

bull 2 full service fixed base operators bull 6 rental car agencies bull 3 flight schools bull 2 aircraft repair operations bull 4 governmental agencies (Cal Fire FAA (2 divisions) CAP) bull Air ambulance service (REACH) bull Restaurant bull 9 commercialindustrial companies (in the Airportrsquos business park) bull United Parcel Service (UPS) air freight operations

The Airport has received almost $587 million in federal grant funding since 2008 and another $11 million in pending grants

Airport Enterprise Fund FY 15-16 Revenues and Expenditures

Revenues - $4949005 Expenditures - $4737120

Misc Utilities Industrial PFCs $252115 Wages amp

Benefits $1916170

40

Maintenance $1087180

County Svcs

$690745 15

Prof Svcs $551370

12

$239540 5 5

Aero Operations $2714595

Non-Aero Operations $1513560

31

Park $222100

4

$498750 10

55 23

Airport Master Plan The FAA recommends master plan updates be completed on a 10 year cycle

in order to reflect changes in FAA standards the aviation market and local regulations

The Airportrsquos Master Plan process gets FAA buy-in on Airport development and helps with funding eligibility

FAA-approved element CountyAirport input Public Input

Airfield Layout Plan Land Use and Boundaries

Airport Update

Airport Update ndash Fuel (Gallons Sold) 3000000 6000

2010 2011 2012 2013 2014 2015 000

1000

2000

3000

4000

5000

shy

500000

1000000

1500000

2000000

2500000

Gal

lons

Airport Update ndash Parking Revenues $1000000 5000

000

500

1000

1500

2000

2500

3000

3500

4000

4500

$shy

$100000

$200000

$300000

$400000

$500000

$600000

$700000

$800000

$900000

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

Airport Update ndash Rental Cars Revenues $6000000 4500

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

000

500

1000

1500

2000

2500

3000

3500

4000

$shy

$1000000

$2000000

$3000000

$4000000

$5000000

Airport Updates ndash Passenger Levels

Airport Update - HorizonAlaska Airlines

bull STS is an integral part of the Horizon AirAlaska Airlines market strategy

bull 65 of Horizon Airrsquos total capacity operates out of STS

bull STS is the 14th busiest Airport in the Horizon network (out of 45 destinations)

bull STS is the 6th largest market by available seat miles flown (Seattle Portland Boise Spokane Reno Santa Rosa)

bull Each new flight added by Horizon has quickly sold at near seat capacity

bull Other airlines have noted STSrsquos ability to absorb new seat capacity

Airline Economic Impacts of STS

bull Alaskarsquos seven daily flights represents approximately bull $161 million economic impact bull 490 jobs in the community

bull Anticipate 14 to 16 commercial flights per day by summer of 2021

bull 16 daily flights represents approximately bull $368 million economic impact bull 1120 jobs in the community

bull Every new flight generates approximately a $23 million economic impact and 70 jobs in the community

bull The average visitor to Sonoma County spends $44298 per day

Fare Comparison for STS and Other Airports in the Region STS San Francisco Oakland San Jose Sacramento

Destination Avg Fare Avg Fare Diff Avg Fare Diff Avg Fare Diff Avg Fare Diff

Los Angeles $12096 $11167 -8 $11754 -3 $11030 -9 $12950 7

with travel costs $18467 34 $22354 46 $18530 35 $23950 49

Seattle $16548 $14379 -13 $13248 -20 $14289 -14 $14704 -11

with travel costs $21679 24 $23848 31 $21789 24 $25704 36

Portland $12952 $12240 -5 $12289 -5 $13342 3 $11302 -13

with travel costs $19540 34 $22889 43 $20842 38 $22302 42

San Diego $12174 $11689 -4 $12403 2 $13703 13 $12895 6

with travel costs $18989 36 $23003 47 $21203 43 $23895 49 Fare comparison based on 2013 Department of Transportation data

bull HorizonAlaska airfares are competitive with other regional airports

bull Add the cost to travel to and from other bay area airports (IRS $054mile) and the fares from STS save the average traveler 24-49

Current Passengers and Growth Potential

Market Annual Actual Total Round Trip Current Growth STS Passengers Passengers Capture Rate Potential

STS-LAX 85213 372030 229 63599

STS-SAN 40265 143161 281 31316

STS-SEA 39711 113852 349 17215

STS-PDX 29638 82057 361 11391

Passenger data for YE June 30 2014

Airline Industry Overview ndash Potential Markets Airport Outbound Round Trip Total Round Trip Potential STS

Passengers Passengers Passengers Guadalajara 135268 193433 52227 Denver 76720 153440 41429 Las Vegas 64080 76244 30498 Honolulu 55918 111836 35788 Phoenix 50224 100448 32143 Maui 43290 86580 27706 Salt Lake City 34894 69788 24426 New York - JFK 157972 315944 85305 Chicago 120596 241192 65122 Boston 99644 199290 53808 New York - EWR 91834 183688 49596 Atlanta 88256 176514 47659 Mexico City 80080 106500 28755 Dallas-Fort Worth 78548 157096 42416 London 71760 143520 38750 Puerto Vallarta 68766 88020 23765 Houston 64970 129940 35084 Paris 63510 127020 34295 Washington DC 62780 125560 33901 Fort Lauderdale 57086 114172 30826 Kona 53364 106728 34153 Kauai 42486 84972 27191 Bookings data for YE 6-30-14

Airports Used by Sonoma County and Surrounding Area Residents

Share of Passenger Bookings ndash All Airlines

Oakland Sacramento 7 5

STS 2

San jose 1

San Francisco 85

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Summary Purpose is to outline the Airports five year needs for

development construction and staffing bull Airport BackgroundGovernanceUpdates bull Airline Industry Overview bull Airport Developments

bull Proposed Capital Improvement Projects bull Financial Analysis

bull Airline Rates and Charges bull Proposed Funding Options

bull Staffing and Aircraft Rescue and Firefighting (ARFF) Analysis

Airport Governance Board of

Supervisors

Transportation and Public Works

Charles M Schulz ndash Sonoma County Airport

Aviation Commission

bull Advisory Only bull Guides Policy

Airport Land Use Commission

bull Compatible land use planning around Airport

bull Does not govern on Airport land uses

Federal Aviation Administration

bull Grant Assurances bull Advisory Circulars bull Operating Certificate bull Master Plan bull Airport Layout Plan bull Land Use bull Navigational Aids bull Air Traffic Control bull Grants

US Department of Transportation

bull American with Disabilities Act bull Civil Rights Act bull Passenger Rights

Caltrans

bull Airport Permit bull Airport Loan Program

Transportation Security Administration (TSA)

bull Airport Security bull Badging Requirements bull Airline Security bull Threat Assessments

Airport Background The County of Sonoma purchased the land for the Airport in 1939 and

opened in 1941

The Airport was used as a US Army base from 1942 to 1946 the Airport was enlarged to include the first hangars and the second runway

The Airport encompasses approximately 1200 acres

The Airport had air service between 1947 to 2001 returning in 2007 with Horizon Air providing flights to Los Angeles and Seattle

Since 2007 Horizon AirAlaska has carried over 18 million passengers

The Board approved the Airportrsquos Master Plan in January 2012

Estimating 81000 annual flight operations (take off or landings) at STS in 2015 - airline (5) and general aviation (95) flights

There are 385 aircraft based at STS

The tenants of the Airport generate over $15 million in possessory taxes annually

4 non-profit operators (PCAM EAA CAFEacute 99rsquos) at the Airport

29 volunteer ambassadors 6 of which work alongside therapy dogs

Current Organizational Chart The Airport has 15 employees on staff

8 operations 5 administrative and 2 managers

Airport Enterprise Fund The Airport is an enterprise fund and receives no General Fund contribution

The two largest revenue generators for the Airport are bull Hangar rental income is over $14 million annually bull Parking lots generating over $1 million in fees in 2015

29 based businesses (with approximately 250 based employees) including

bull 2 full service fixed base operators bull 6 rental car agencies bull 3 flight schools bull 2 aircraft repair operations bull 4 governmental agencies (Cal Fire FAA (2 divisions) CAP) bull Air ambulance service (REACH) bull Restaurant bull 9 commercialindustrial companies (in the Airportrsquos business park) bull United Parcel Service (UPS) air freight operations

The Airport has received almost $587 million in federal grant funding since 2008 and another $11 million in pending grants

Airport Enterprise Fund FY 15-16 Revenues and Expenditures

Revenues - $4949005 Expenditures - $4737120

Misc Utilities Industrial PFCs $252115 Wages amp

Benefits $1916170

40

Maintenance $1087180

County Svcs

$690745 15

Prof Svcs $551370

12

$239540 5 5

Aero Operations $2714595

Non-Aero Operations $1513560

31

Park $222100

4

$498750 10

55 23

Airport Master Plan The FAA recommends master plan updates be completed on a 10 year cycle

in order to reflect changes in FAA standards the aviation market and local regulations

The Airportrsquos Master Plan process gets FAA buy-in on Airport development and helps with funding eligibility

FAA-approved element CountyAirport input Public Input

Airfield Layout Plan Land Use and Boundaries

Airport Update

Airport Update ndash Fuel (Gallons Sold) 3000000 6000

2010 2011 2012 2013 2014 2015 000

1000

2000

3000

4000

5000

shy

500000

1000000

1500000

2000000

2500000

Gal

lons

Airport Update ndash Parking Revenues $1000000 5000

000

500

1000

1500

2000

2500

3000

3500

4000

4500

$shy

$100000

$200000

$300000

$400000

$500000

$600000

$700000

$800000

$900000

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

Airport Update ndash Rental Cars Revenues $6000000 4500

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

000

500

1000

1500

2000

2500

3000

3500

4000

$shy

$1000000

$2000000

$3000000

$4000000

$5000000

Airport Updates ndash Passenger Levels

Airport Update - HorizonAlaska Airlines

bull STS is an integral part of the Horizon AirAlaska Airlines market strategy

bull 65 of Horizon Airrsquos total capacity operates out of STS

bull STS is the 14th busiest Airport in the Horizon network (out of 45 destinations)

bull STS is the 6th largest market by available seat miles flown (Seattle Portland Boise Spokane Reno Santa Rosa)

bull Each new flight added by Horizon has quickly sold at near seat capacity

bull Other airlines have noted STSrsquos ability to absorb new seat capacity

Airline Economic Impacts of STS

bull Alaskarsquos seven daily flights represents approximately bull $161 million economic impact bull 490 jobs in the community

bull Anticipate 14 to 16 commercial flights per day by summer of 2021

bull 16 daily flights represents approximately bull $368 million economic impact bull 1120 jobs in the community

bull Every new flight generates approximately a $23 million economic impact and 70 jobs in the community

bull The average visitor to Sonoma County spends $44298 per day

Fare Comparison for STS and Other Airports in the Region STS San Francisco Oakland San Jose Sacramento

Destination Avg Fare Avg Fare Diff Avg Fare Diff Avg Fare Diff Avg Fare Diff

Los Angeles $12096 $11167 -8 $11754 -3 $11030 -9 $12950 7

with travel costs $18467 34 $22354 46 $18530 35 $23950 49

Seattle $16548 $14379 -13 $13248 -20 $14289 -14 $14704 -11

with travel costs $21679 24 $23848 31 $21789 24 $25704 36

Portland $12952 $12240 -5 $12289 -5 $13342 3 $11302 -13

with travel costs $19540 34 $22889 43 $20842 38 $22302 42

San Diego $12174 $11689 -4 $12403 2 $13703 13 $12895 6

with travel costs $18989 36 $23003 47 $21203 43 $23895 49 Fare comparison based on 2013 Department of Transportation data

bull HorizonAlaska airfares are competitive with other regional airports

bull Add the cost to travel to and from other bay area airports (IRS $054mile) and the fares from STS save the average traveler 24-49

Current Passengers and Growth Potential

Market Annual Actual Total Round Trip Current Growth STS Passengers Passengers Capture Rate Potential

STS-LAX 85213 372030 229 63599

STS-SAN 40265 143161 281 31316

STS-SEA 39711 113852 349 17215

STS-PDX 29638 82057 361 11391

Passenger data for YE June 30 2014

Airline Industry Overview ndash Potential Markets Airport Outbound Round Trip Total Round Trip Potential STS

Passengers Passengers Passengers Guadalajara 135268 193433 52227 Denver 76720 153440 41429 Las Vegas 64080 76244 30498 Honolulu 55918 111836 35788 Phoenix 50224 100448 32143 Maui 43290 86580 27706 Salt Lake City 34894 69788 24426 New York - JFK 157972 315944 85305 Chicago 120596 241192 65122 Boston 99644 199290 53808 New York - EWR 91834 183688 49596 Atlanta 88256 176514 47659 Mexico City 80080 106500 28755 Dallas-Fort Worth 78548 157096 42416 London 71760 143520 38750 Puerto Vallarta 68766 88020 23765 Houston 64970 129940 35084 Paris 63510 127020 34295 Washington DC 62780 125560 33901 Fort Lauderdale 57086 114172 30826 Kona 53364 106728 34153 Kauai 42486 84972 27191 Bookings data for YE 6-30-14

Airports Used by Sonoma County and Surrounding Area Residents

Share of Passenger Bookings ndash All Airlines

Oakland Sacramento 7 5

STS 2

San jose 1

San Francisco 85

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Airport Governance Board of

Supervisors

Transportation and Public Works

Charles M Schulz ndash Sonoma County Airport

Aviation Commission

bull Advisory Only bull Guides Policy

Airport Land Use Commission

bull Compatible land use planning around Airport

bull Does not govern on Airport land uses

Federal Aviation Administration

bull Grant Assurances bull Advisory Circulars bull Operating Certificate bull Master Plan bull Airport Layout Plan bull Land Use bull Navigational Aids bull Air Traffic Control bull Grants

US Department of Transportation

bull American with Disabilities Act bull Civil Rights Act bull Passenger Rights

Caltrans

bull Airport Permit bull Airport Loan Program

Transportation Security Administration (TSA)

bull Airport Security bull Badging Requirements bull Airline Security bull Threat Assessments

Airport Background The County of Sonoma purchased the land for the Airport in 1939 and

opened in 1941

The Airport was used as a US Army base from 1942 to 1946 the Airport was enlarged to include the first hangars and the second runway

The Airport encompasses approximately 1200 acres

The Airport had air service between 1947 to 2001 returning in 2007 with Horizon Air providing flights to Los Angeles and Seattle

Since 2007 Horizon AirAlaska has carried over 18 million passengers

The Board approved the Airportrsquos Master Plan in January 2012

Estimating 81000 annual flight operations (take off or landings) at STS in 2015 - airline (5) and general aviation (95) flights

There are 385 aircraft based at STS

The tenants of the Airport generate over $15 million in possessory taxes annually

4 non-profit operators (PCAM EAA CAFEacute 99rsquos) at the Airport

29 volunteer ambassadors 6 of which work alongside therapy dogs

Current Organizational Chart The Airport has 15 employees on staff

8 operations 5 administrative and 2 managers

Airport Enterprise Fund The Airport is an enterprise fund and receives no General Fund contribution

The two largest revenue generators for the Airport are bull Hangar rental income is over $14 million annually bull Parking lots generating over $1 million in fees in 2015

29 based businesses (with approximately 250 based employees) including

bull 2 full service fixed base operators bull 6 rental car agencies bull 3 flight schools bull 2 aircraft repair operations bull 4 governmental agencies (Cal Fire FAA (2 divisions) CAP) bull Air ambulance service (REACH) bull Restaurant bull 9 commercialindustrial companies (in the Airportrsquos business park) bull United Parcel Service (UPS) air freight operations

The Airport has received almost $587 million in federal grant funding since 2008 and another $11 million in pending grants

Airport Enterprise Fund FY 15-16 Revenues and Expenditures

Revenues - $4949005 Expenditures - $4737120

Misc Utilities Industrial PFCs $252115 Wages amp

Benefits $1916170

40

Maintenance $1087180

County Svcs

$690745 15

Prof Svcs $551370

12

$239540 5 5

Aero Operations $2714595

Non-Aero Operations $1513560

31

Park $222100

4

$498750 10

55 23

Airport Master Plan The FAA recommends master plan updates be completed on a 10 year cycle

in order to reflect changes in FAA standards the aviation market and local regulations

The Airportrsquos Master Plan process gets FAA buy-in on Airport development and helps with funding eligibility

FAA-approved element CountyAirport input Public Input

Airfield Layout Plan Land Use and Boundaries

Airport Update

Airport Update ndash Fuel (Gallons Sold) 3000000 6000

2010 2011 2012 2013 2014 2015 000

1000

2000

3000

4000

5000

shy

500000

1000000

1500000

2000000

2500000

Gal

lons

Airport Update ndash Parking Revenues $1000000 5000

000

500

1000

1500

2000

2500

3000

3500

4000

4500

$shy

$100000

$200000

$300000

$400000

$500000

$600000

$700000

$800000

$900000

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

Airport Update ndash Rental Cars Revenues $6000000 4500

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

000

500

1000

1500

2000

2500

3000

3500

4000

$shy

$1000000

$2000000

$3000000

$4000000

$5000000

Airport Updates ndash Passenger Levels

Airport Update - HorizonAlaska Airlines

bull STS is an integral part of the Horizon AirAlaska Airlines market strategy

bull 65 of Horizon Airrsquos total capacity operates out of STS

bull STS is the 14th busiest Airport in the Horizon network (out of 45 destinations)

bull STS is the 6th largest market by available seat miles flown (Seattle Portland Boise Spokane Reno Santa Rosa)

bull Each new flight added by Horizon has quickly sold at near seat capacity

bull Other airlines have noted STSrsquos ability to absorb new seat capacity

Airline Economic Impacts of STS

bull Alaskarsquos seven daily flights represents approximately bull $161 million economic impact bull 490 jobs in the community

bull Anticipate 14 to 16 commercial flights per day by summer of 2021

bull 16 daily flights represents approximately bull $368 million economic impact bull 1120 jobs in the community

bull Every new flight generates approximately a $23 million economic impact and 70 jobs in the community

bull The average visitor to Sonoma County spends $44298 per day

Fare Comparison for STS and Other Airports in the Region STS San Francisco Oakland San Jose Sacramento

Destination Avg Fare Avg Fare Diff Avg Fare Diff Avg Fare Diff Avg Fare Diff

Los Angeles $12096 $11167 -8 $11754 -3 $11030 -9 $12950 7

with travel costs $18467 34 $22354 46 $18530 35 $23950 49

Seattle $16548 $14379 -13 $13248 -20 $14289 -14 $14704 -11

with travel costs $21679 24 $23848 31 $21789 24 $25704 36

Portland $12952 $12240 -5 $12289 -5 $13342 3 $11302 -13

with travel costs $19540 34 $22889 43 $20842 38 $22302 42

San Diego $12174 $11689 -4 $12403 2 $13703 13 $12895 6

with travel costs $18989 36 $23003 47 $21203 43 $23895 49 Fare comparison based on 2013 Department of Transportation data

bull HorizonAlaska airfares are competitive with other regional airports

bull Add the cost to travel to and from other bay area airports (IRS $054mile) and the fares from STS save the average traveler 24-49

Current Passengers and Growth Potential

Market Annual Actual Total Round Trip Current Growth STS Passengers Passengers Capture Rate Potential

STS-LAX 85213 372030 229 63599

STS-SAN 40265 143161 281 31316

STS-SEA 39711 113852 349 17215

STS-PDX 29638 82057 361 11391

Passenger data for YE June 30 2014

Airline Industry Overview ndash Potential Markets Airport Outbound Round Trip Total Round Trip Potential STS

Passengers Passengers Passengers Guadalajara 135268 193433 52227 Denver 76720 153440 41429 Las Vegas 64080 76244 30498 Honolulu 55918 111836 35788 Phoenix 50224 100448 32143 Maui 43290 86580 27706 Salt Lake City 34894 69788 24426 New York - JFK 157972 315944 85305 Chicago 120596 241192 65122 Boston 99644 199290 53808 New York - EWR 91834 183688 49596 Atlanta 88256 176514 47659 Mexico City 80080 106500 28755 Dallas-Fort Worth 78548 157096 42416 London 71760 143520 38750 Puerto Vallarta 68766 88020 23765 Houston 64970 129940 35084 Paris 63510 127020 34295 Washington DC 62780 125560 33901 Fort Lauderdale 57086 114172 30826 Kona 53364 106728 34153 Kauai 42486 84972 27191 Bookings data for YE 6-30-14

Airports Used by Sonoma County and Surrounding Area Residents

Share of Passenger Bookings ndash All Airlines

Oakland Sacramento 7 5

STS 2

San jose 1

San Francisco 85

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Airport Background The County of Sonoma purchased the land for the Airport in 1939 and

opened in 1941

The Airport was used as a US Army base from 1942 to 1946 the Airport was enlarged to include the first hangars and the second runway

The Airport encompasses approximately 1200 acres

The Airport had air service between 1947 to 2001 returning in 2007 with Horizon Air providing flights to Los Angeles and Seattle

Since 2007 Horizon AirAlaska has carried over 18 million passengers

The Board approved the Airportrsquos Master Plan in January 2012

Estimating 81000 annual flight operations (take off or landings) at STS in 2015 - airline (5) and general aviation (95) flights

There are 385 aircraft based at STS

The tenants of the Airport generate over $15 million in possessory taxes annually

4 non-profit operators (PCAM EAA CAFEacute 99rsquos) at the Airport

29 volunteer ambassadors 6 of which work alongside therapy dogs

Current Organizational Chart The Airport has 15 employees on staff

8 operations 5 administrative and 2 managers

Airport Enterprise Fund The Airport is an enterprise fund and receives no General Fund contribution

The two largest revenue generators for the Airport are bull Hangar rental income is over $14 million annually bull Parking lots generating over $1 million in fees in 2015

29 based businesses (with approximately 250 based employees) including

bull 2 full service fixed base operators bull 6 rental car agencies bull 3 flight schools bull 2 aircraft repair operations bull 4 governmental agencies (Cal Fire FAA (2 divisions) CAP) bull Air ambulance service (REACH) bull Restaurant bull 9 commercialindustrial companies (in the Airportrsquos business park) bull United Parcel Service (UPS) air freight operations

The Airport has received almost $587 million in federal grant funding since 2008 and another $11 million in pending grants

Airport Enterprise Fund FY 15-16 Revenues and Expenditures

Revenues - $4949005 Expenditures - $4737120

Misc Utilities Industrial PFCs $252115 Wages amp

Benefits $1916170

40

Maintenance $1087180

County Svcs

$690745 15

Prof Svcs $551370

12

$239540 5 5

Aero Operations $2714595

Non-Aero Operations $1513560

31

Park $222100

4

$498750 10

55 23

Airport Master Plan The FAA recommends master plan updates be completed on a 10 year cycle

in order to reflect changes in FAA standards the aviation market and local regulations

The Airportrsquos Master Plan process gets FAA buy-in on Airport development and helps with funding eligibility

FAA-approved element CountyAirport input Public Input

Airfield Layout Plan Land Use and Boundaries

Airport Update

Airport Update ndash Fuel (Gallons Sold) 3000000 6000

2010 2011 2012 2013 2014 2015 000

1000

2000

3000

4000

5000

shy

500000

1000000

1500000

2000000

2500000

Gal

lons

Airport Update ndash Parking Revenues $1000000 5000

000

500

1000

1500

2000

2500

3000

3500

4000

4500

$shy

$100000

$200000

$300000

$400000

$500000

$600000

$700000

$800000

$900000

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

Airport Update ndash Rental Cars Revenues $6000000 4500

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

000

500

1000

1500

2000

2500

3000

3500

4000

$shy

$1000000

$2000000

$3000000

$4000000

$5000000

Airport Updates ndash Passenger Levels

Airport Update - HorizonAlaska Airlines

bull STS is an integral part of the Horizon AirAlaska Airlines market strategy

bull 65 of Horizon Airrsquos total capacity operates out of STS

bull STS is the 14th busiest Airport in the Horizon network (out of 45 destinations)

bull STS is the 6th largest market by available seat miles flown (Seattle Portland Boise Spokane Reno Santa Rosa)

bull Each new flight added by Horizon has quickly sold at near seat capacity

bull Other airlines have noted STSrsquos ability to absorb new seat capacity

Airline Economic Impacts of STS

bull Alaskarsquos seven daily flights represents approximately bull $161 million economic impact bull 490 jobs in the community

bull Anticipate 14 to 16 commercial flights per day by summer of 2021

bull 16 daily flights represents approximately bull $368 million economic impact bull 1120 jobs in the community

bull Every new flight generates approximately a $23 million economic impact and 70 jobs in the community

bull The average visitor to Sonoma County spends $44298 per day

Fare Comparison for STS and Other Airports in the Region STS San Francisco Oakland San Jose Sacramento

Destination Avg Fare Avg Fare Diff Avg Fare Diff Avg Fare Diff Avg Fare Diff

Los Angeles $12096 $11167 -8 $11754 -3 $11030 -9 $12950 7

with travel costs $18467 34 $22354 46 $18530 35 $23950 49

Seattle $16548 $14379 -13 $13248 -20 $14289 -14 $14704 -11

with travel costs $21679 24 $23848 31 $21789 24 $25704 36

Portland $12952 $12240 -5 $12289 -5 $13342 3 $11302 -13

with travel costs $19540 34 $22889 43 $20842 38 $22302 42

San Diego $12174 $11689 -4 $12403 2 $13703 13 $12895 6

with travel costs $18989 36 $23003 47 $21203 43 $23895 49 Fare comparison based on 2013 Department of Transportation data

bull HorizonAlaska airfares are competitive with other regional airports

bull Add the cost to travel to and from other bay area airports (IRS $054mile) and the fares from STS save the average traveler 24-49

Current Passengers and Growth Potential

Market Annual Actual Total Round Trip Current Growth STS Passengers Passengers Capture Rate Potential

STS-LAX 85213 372030 229 63599

STS-SAN 40265 143161 281 31316

STS-SEA 39711 113852 349 17215

STS-PDX 29638 82057 361 11391

Passenger data for YE June 30 2014

Airline Industry Overview ndash Potential Markets Airport Outbound Round Trip Total Round Trip Potential STS

Passengers Passengers Passengers Guadalajara 135268 193433 52227 Denver 76720 153440 41429 Las Vegas 64080 76244 30498 Honolulu 55918 111836 35788 Phoenix 50224 100448 32143 Maui 43290 86580 27706 Salt Lake City 34894 69788 24426 New York - JFK 157972 315944 85305 Chicago 120596 241192 65122 Boston 99644 199290 53808 New York - EWR 91834 183688 49596 Atlanta 88256 176514 47659 Mexico City 80080 106500 28755 Dallas-Fort Worth 78548 157096 42416 London 71760 143520 38750 Puerto Vallarta 68766 88020 23765 Houston 64970 129940 35084 Paris 63510 127020 34295 Washington DC 62780 125560 33901 Fort Lauderdale 57086 114172 30826 Kona 53364 106728 34153 Kauai 42486 84972 27191 Bookings data for YE 6-30-14

Airports Used by Sonoma County and Surrounding Area Residents

Share of Passenger Bookings ndash All Airlines

Oakland Sacramento 7 5

STS 2

San jose 1

San Francisco 85

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Current Organizational Chart The Airport has 15 employees on staff

8 operations 5 administrative and 2 managers

Airport Enterprise Fund The Airport is an enterprise fund and receives no General Fund contribution

The two largest revenue generators for the Airport are bull Hangar rental income is over $14 million annually bull Parking lots generating over $1 million in fees in 2015

29 based businesses (with approximately 250 based employees) including

bull 2 full service fixed base operators bull 6 rental car agencies bull 3 flight schools bull 2 aircraft repair operations bull 4 governmental agencies (Cal Fire FAA (2 divisions) CAP) bull Air ambulance service (REACH) bull Restaurant bull 9 commercialindustrial companies (in the Airportrsquos business park) bull United Parcel Service (UPS) air freight operations

The Airport has received almost $587 million in federal grant funding since 2008 and another $11 million in pending grants

Airport Enterprise Fund FY 15-16 Revenues and Expenditures

Revenues - $4949005 Expenditures - $4737120

Misc Utilities Industrial PFCs $252115 Wages amp

Benefits $1916170

40

Maintenance $1087180

County Svcs

$690745 15

Prof Svcs $551370

12

$239540 5 5

Aero Operations $2714595

Non-Aero Operations $1513560

31

Park $222100

4

$498750 10

55 23

Airport Master Plan The FAA recommends master plan updates be completed on a 10 year cycle

in order to reflect changes in FAA standards the aviation market and local regulations

The Airportrsquos Master Plan process gets FAA buy-in on Airport development and helps with funding eligibility

FAA-approved element CountyAirport input Public Input

Airfield Layout Plan Land Use and Boundaries

Airport Update

Airport Update ndash Fuel (Gallons Sold) 3000000 6000

2010 2011 2012 2013 2014 2015 000

1000

2000

3000

4000

5000

shy

500000

1000000

1500000

2000000

2500000

Gal

lons

Airport Update ndash Parking Revenues $1000000 5000

000

500

1000

1500

2000

2500

3000

3500

4000

4500

$shy

$100000

$200000

$300000

$400000

$500000

$600000

$700000

$800000

$900000

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

Airport Update ndash Rental Cars Revenues $6000000 4500

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

000

500

1000

1500

2000

2500

3000

3500

4000

$shy

$1000000

$2000000

$3000000

$4000000

$5000000

Airport Updates ndash Passenger Levels

Airport Update - HorizonAlaska Airlines

bull STS is an integral part of the Horizon AirAlaska Airlines market strategy

bull 65 of Horizon Airrsquos total capacity operates out of STS

bull STS is the 14th busiest Airport in the Horizon network (out of 45 destinations)

bull STS is the 6th largest market by available seat miles flown (Seattle Portland Boise Spokane Reno Santa Rosa)

bull Each new flight added by Horizon has quickly sold at near seat capacity

bull Other airlines have noted STSrsquos ability to absorb new seat capacity

Airline Economic Impacts of STS

bull Alaskarsquos seven daily flights represents approximately bull $161 million economic impact bull 490 jobs in the community

bull Anticipate 14 to 16 commercial flights per day by summer of 2021

bull 16 daily flights represents approximately bull $368 million economic impact bull 1120 jobs in the community

bull Every new flight generates approximately a $23 million economic impact and 70 jobs in the community

bull The average visitor to Sonoma County spends $44298 per day

Fare Comparison for STS and Other Airports in the Region STS San Francisco Oakland San Jose Sacramento

Destination Avg Fare Avg Fare Diff Avg Fare Diff Avg Fare Diff Avg Fare Diff

Los Angeles $12096 $11167 -8 $11754 -3 $11030 -9 $12950 7

with travel costs $18467 34 $22354 46 $18530 35 $23950 49

Seattle $16548 $14379 -13 $13248 -20 $14289 -14 $14704 -11

with travel costs $21679 24 $23848 31 $21789 24 $25704 36

Portland $12952 $12240 -5 $12289 -5 $13342 3 $11302 -13

with travel costs $19540 34 $22889 43 $20842 38 $22302 42

San Diego $12174 $11689 -4 $12403 2 $13703 13 $12895 6

with travel costs $18989 36 $23003 47 $21203 43 $23895 49 Fare comparison based on 2013 Department of Transportation data

bull HorizonAlaska airfares are competitive with other regional airports

bull Add the cost to travel to and from other bay area airports (IRS $054mile) and the fares from STS save the average traveler 24-49

Current Passengers and Growth Potential

Market Annual Actual Total Round Trip Current Growth STS Passengers Passengers Capture Rate Potential

STS-LAX 85213 372030 229 63599

STS-SAN 40265 143161 281 31316

STS-SEA 39711 113852 349 17215

STS-PDX 29638 82057 361 11391

Passenger data for YE June 30 2014

Airline Industry Overview ndash Potential Markets Airport Outbound Round Trip Total Round Trip Potential STS

Passengers Passengers Passengers Guadalajara 135268 193433 52227 Denver 76720 153440 41429 Las Vegas 64080 76244 30498 Honolulu 55918 111836 35788 Phoenix 50224 100448 32143 Maui 43290 86580 27706 Salt Lake City 34894 69788 24426 New York - JFK 157972 315944 85305 Chicago 120596 241192 65122 Boston 99644 199290 53808 New York - EWR 91834 183688 49596 Atlanta 88256 176514 47659 Mexico City 80080 106500 28755 Dallas-Fort Worth 78548 157096 42416 London 71760 143520 38750 Puerto Vallarta 68766 88020 23765 Houston 64970 129940 35084 Paris 63510 127020 34295 Washington DC 62780 125560 33901 Fort Lauderdale 57086 114172 30826 Kona 53364 106728 34153 Kauai 42486 84972 27191 Bookings data for YE 6-30-14

Airports Used by Sonoma County and Surrounding Area Residents

Share of Passenger Bookings ndash All Airlines

Oakland Sacramento 7 5

STS 2

San jose 1

San Francisco 85

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Airport Enterprise Fund The Airport is an enterprise fund and receives no General Fund contribution

The two largest revenue generators for the Airport are bull Hangar rental income is over $14 million annually bull Parking lots generating over $1 million in fees in 2015

29 based businesses (with approximately 250 based employees) including

bull 2 full service fixed base operators bull 6 rental car agencies bull 3 flight schools bull 2 aircraft repair operations bull 4 governmental agencies (Cal Fire FAA (2 divisions) CAP) bull Air ambulance service (REACH) bull Restaurant bull 9 commercialindustrial companies (in the Airportrsquos business park) bull United Parcel Service (UPS) air freight operations

The Airport has received almost $587 million in federal grant funding since 2008 and another $11 million in pending grants

Airport Enterprise Fund FY 15-16 Revenues and Expenditures

Revenues - $4949005 Expenditures - $4737120

Misc Utilities Industrial PFCs $252115 Wages amp

Benefits $1916170

40

Maintenance $1087180

County Svcs

$690745 15

Prof Svcs $551370

12

$239540 5 5

Aero Operations $2714595

Non-Aero Operations $1513560

31

Park $222100

4

$498750 10

55 23

Airport Master Plan The FAA recommends master plan updates be completed on a 10 year cycle

in order to reflect changes in FAA standards the aviation market and local regulations

The Airportrsquos Master Plan process gets FAA buy-in on Airport development and helps with funding eligibility

FAA-approved element CountyAirport input Public Input

Airfield Layout Plan Land Use and Boundaries

Airport Update

Airport Update ndash Fuel (Gallons Sold) 3000000 6000

2010 2011 2012 2013 2014 2015 000

1000

2000

3000

4000

5000

shy

500000

1000000

1500000

2000000

2500000

Gal

lons

Airport Update ndash Parking Revenues $1000000 5000

000

500

1000

1500

2000

2500

3000

3500

4000

4500

$shy

$100000

$200000

$300000

$400000

$500000

$600000

$700000

$800000

$900000

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

Airport Update ndash Rental Cars Revenues $6000000 4500

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

000

500

1000

1500

2000

2500

3000

3500

4000

$shy

$1000000

$2000000

$3000000

$4000000

$5000000

Airport Updates ndash Passenger Levels

Airport Update - HorizonAlaska Airlines

bull STS is an integral part of the Horizon AirAlaska Airlines market strategy

bull 65 of Horizon Airrsquos total capacity operates out of STS

bull STS is the 14th busiest Airport in the Horizon network (out of 45 destinations)

bull STS is the 6th largest market by available seat miles flown (Seattle Portland Boise Spokane Reno Santa Rosa)

bull Each new flight added by Horizon has quickly sold at near seat capacity

bull Other airlines have noted STSrsquos ability to absorb new seat capacity

Airline Economic Impacts of STS

bull Alaskarsquos seven daily flights represents approximately bull $161 million economic impact bull 490 jobs in the community

bull Anticipate 14 to 16 commercial flights per day by summer of 2021

bull 16 daily flights represents approximately bull $368 million economic impact bull 1120 jobs in the community

bull Every new flight generates approximately a $23 million economic impact and 70 jobs in the community

bull The average visitor to Sonoma County spends $44298 per day

Fare Comparison for STS and Other Airports in the Region STS San Francisco Oakland San Jose Sacramento

Destination Avg Fare Avg Fare Diff Avg Fare Diff Avg Fare Diff Avg Fare Diff

Los Angeles $12096 $11167 -8 $11754 -3 $11030 -9 $12950 7

with travel costs $18467 34 $22354 46 $18530 35 $23950 49

Seattle $16548 $14379 -13 $13248 -20 $14289 -14 $14704 -11

with travel costs $21679 24 $23848 31 $21789 24 $25704 36

Portland $12952 $12240 -5 $12289 -5 $13342 3 $11302 -13

with travel costs $19540 34 $22889 43 $20842 38 $22302 42

San Diego $12174 $11689 -4 $12403 2 $13703 13 $12895 6

with travel costs $18989 36 $23003 47 $21203 43 $23895 49 Fare comparison based on 2013 Department of Transportation data

bull HorizonAlaska airfares are competitive with other regional airports

bull Add the cost to travel to and from other bay area airports (IRS $054mile) and the fares from STS save the average traveler 24-49

Current Passengers and Growth Potential

Market Annual Actual Total Round Trip Current Growth STS Passengers Passengers Capture Rate Potential

STS-LAX 85213 372030 229 63599

STS-SAN 40265 143161 281 31316

STS-SEA 39711 113852 349 17215

STS-PDX 29638 82057 361 11391

Passenger data for YE June 30 2014

Airline Industry Overview ndash Potential Markets Airport Outbound Round Trip Total Round Trip Potential STS

Passengers Passengers Passengers Guadalajara 135268 193433 52227 Denver 76720 153440 41429 Las Vegas 64080 76244 30498 Honolulu 55918 111836 35788 Phoenix 50224 100448 32143 Maui 43290 86580 27706 Salt Lake City 34894 69788 24426 New York - JFK 157972 315944 85305 Chicago 120596 241192 65122 Boston 99644 199290 53808 New York - EWR 91834 183688 49596 Atlanta 88256 176514 47659 Mexico City 80080 106500 28755 Dallas-Fort Worth 78548 157096 42416 London 71760 143520 38750 Puerto Vallarta 68766 88020 23765 Houston 64970 129940 35084 Paris 63510 127020 34295 Washington DC 62780 125560 33901 Fort Lauderdale 57086 114172 30826 Kona 53364 106728 34153 Kauai 42486 84972 27191 Bookings data for YE 6-30-14

Airports Used by Sonoma County and Surrounding Area Residents

Share of Passenger Bookings ndash All Airlines

Oakland Sacramento 7 5

STS 2

San jose 1

San Francisco 85

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Airport Enterprise Fund FY 15-16 Revenues and Expenditures

Revenues - $4949005 Expenditures - $4737120

Misc Utilities Industrial PFCs $252115 Wages amp

Benefits $1916170

40

Maintenance $1087180

County Svcs

$690745 15

Prof Svcs $551370

12

$239540 5 5

Aero Operations $2714595

Non-Aero Operations $1513560

31

Park $222100

4

$498750 10

55 23

Airport Master Plan The FAA recommends master plan updates be completed on a 10 year cycle

in order to reflect changes in FAA standards the aviation market and local regulations

The Airportrsquos Master Plan process gets FAA buy-in on Airport development and helps with funding eligibility

FAA-approved element CountyAirport input Public Input

Airfield Layout Plan Land Use and Boundaries

Airport Update

Airport Update ndash Fuel (Gallons Sold) 3000000 6000

2010 2011 2012 2013 2014 2015 000

1000

2000

3000

4000

5000

shy

500000

1000000

1500000

2000000

2500000

Gal

lons

Airport Update ndash Parking Revenues $1000000 5000

000

500

1000

1500

2000

2500

3000

3500

4000

4500

$shy

$100000

$200000

$300000

$400000

$500000

$600000

$700000

$800000

$900000

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

Airport Update ndash Rental Cars Revenues $6000000 4500

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

000

500

1000

1500

2000

2500

3000

3500

4000

$shy

$1000000

$2000000

$3000000

$4000000

$5000000

Airport Updates ndash Passenger Levels

Airport Update - HorizonAlaska Airlines

bull STS is an integral part of the Horizon AirAlaska Airlines market strategy

bull 65 of Horizon Airrsquos total capacity operates out of STS

bull STS is the 14th busiest Airport in the Horizon network (out of 45 destinations)

bull STS is the 6th largest market by available seat miles flown (Seattle Portland Boise Spokane Reno Santa Rosa)

bull Each new flight added by Horizon has quickly sold at near seat capacity

bull Other airlines have noted STSrsquos ability to absorb new seat capacity

Airline Economic Impacts of STS

bull Alaskarsquos seven daily flights represents approximately bull $161 million economic impact bull 490 jobs in the community

bull Anticipate 14 to 16 commercial flights per day by summer of 2021

bull 16 daily flights represents approximately bull $368 million economic impact bull 1120 jobs in the community

bull Every new flight generates approximately a $23 million economic impact and 70 jobs in the community

bull The average visitor to Sonoma County spends $44298 per day

Fare Comparison for STS and Other Airports in the Region STS San Francisco Oakland San Jose Sacramento

Destination Avg Fare Avg Fare Diff Avg Fare Diff Avg Fare Diff Avg Fare Diff

Los Angeles $12096 $11167 -8 $11754 -3 $11030 -9 $12950 7

with travel costs $18467 34 $22354 46 $18530 35 $23950 49

Seattle $16548 $14379 -13 $13248 -20 $14289 -14 $14704 -11

with travel costs $21679 24 $23848 31 $21789 24 $25704 36

Portland $12952 $12240 -5 $12289 -5 $13342 3 $11302 -13

with travel costs $19540 34 $22889 43 $20842 38 $22302 42

San Diego $12174 $11689 -4 $12403 2 $13703 13 $12895 6

with travel costs $18989 36 $23003 47 $21203 43 $23895 49 Fare comparison based on 2013 Department of Transportation data

bull HorizonAlaska airfares are competitive with other regional airports

bull Add the cost to travel to and from other bay area airports (IRS $054mile) and the fares from STS save the average traveler 24-49

Current Passengers and Growth Potential

Market Annual Actual Total Round Trip Current Growth STS Passengers Passengers Capture Rate Potential

STS-LAX 85213 372030 229 63599

STS-SAN 40265 143161 281 31316

STS-SEA 39711 113852 349 17215

STS-PDX 29638 82057 361 11391

Passenger data for YE June 30 2014

Airline Industry Overview ndash Potential Markets Airport Outbound Round Trip Total Round Trip Potential STS

Passengers Passengers Passengers Guadalajara 135268 193433 52227 Denver 76720 153440 41429 Las Vegas 64080 76244 30498 Honolulu 55918 111836 35788 Phoenix 50224 100448 32143 Maui 43290 86580 27706 Salt Lake City 34894 69788 24426 New York - JFK 157972 315944 85305 Chicago 120596 241192 65122 Boston 99644 199290 53808 New York - EWR 91834 183688 49596 Atlanta 88256 176514 47659 Mexico City 80080 106500 28755 Dallas-Fort Worth 78548 157096 42416 London 71760 143520 38750 Puerto Vallarta 68766 88020 23765 Houston 64970 129940 35084 Paris 63510 127020 34295 Washington DC 62780 125560 33901 Fort Lauderdale 57086 114172 30826 Kona 53364 106728 34153 Kauai 42486 84972 27191 Bookings data for YE 6-30-14

Airports Used by Sonoma County and Surrounding Area Residents

Share of Passenger Bookings ndash All Airlines

Oakland Sacramento 7 5

STS 2

San jose 1

San Francisco 85

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Airport Master Plan The FAA recommends master plan updates be completed on a 10 year cycle

in order to reflect changes in FAA standards the aviation market and local regulations

The Airportrsquos Master Plan process gets FAA buy-in on Airport development and helps with funding eligibility

FAA-approved element CountyAirport input Public Input

Airfield Layout Plan Land Use and Boundaries

Airport Update

Airport Update ndash Fuel (Gallons Sold) 3000000 6000

2010 2011 2012 2013 2014 2015 000

1000

2000

3000

4000

5000

shy

500000

1000000

1500000

2000000

2500000

Gal

lons

Airport Update ndash Parking Revenues $1000000 5000

000

500

1000

1500

2000

2500

3000

3500

4000

4500

$shy

$100000

$200000

$300000

$400000

$500000

$600000

$700000

$800000

$900000

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

Airport Update ndash Rental Cars Revenues $6000000 4500

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

000

500

1000

1500

2000

2500

3000

3500

4000

$shy

$1000000

$2000000

$3000000

$4000000

$5000000

Airport Updates ndash Passenger Levels

Airport Update - HorizonAlaska Airlines

bull STS is an integral part of the Horizon AirAlaska Airlines market strategy

bull 65 of Horizon Airrsquos total capacity operates out of STS

bull STS is the 14th busiest Airport in the Horizon network (out of 45 destinations)

bull STS is the 6th largest market by available seat miles flown (Seattle Portland Boise Spokane Reno Santa Rosa)

bull Each new flight added by Horizon has quickly sold at near seat capacity

bull Other airlines have noted STSrsquos ability to absorb new seat capacity

Airline Economic Impacts of STS

bull Alaskarsquos seven daily flights represents approximately bull $161 million economic impact bull 490 jobs in the community

bull Anticipate 14 to 16 commercial flights per day by summer of 2021

bull 16 daily flights represents approximately bull $368 million economic impact bull 1120 jobs in the community

bull Every new flight generates approximately a $23 million economic impact and 70 jobs in the community

bull The average visitor to Sonoma County spends $44298 per day

Fare Comparison for STS and Other Airports in the Region STS San Francisco Oakland San Jose Sacramento

Destination Avg Fare Avg Fare Diff Avg Fare Diff Avg Fare Diff Avg Fare Diff

Los Angeles $12096 $11167 -8 $11754 -3 $11030 -9 $12950 7

with travel costs $18467 34 $22354 46 $18530 35 $23950 49

Seattle $16548 $14379 -13 $13248 -20 $14289 -14 $14704 -11

with travel costs $21679 24 $23848 31 $21789 24 $25704 36

Portland $12952 $12240 -5 $12289 -5 $13342 3 $11302 -13

with travel costs $19540 34 $22889 43 $20842 38 $22302 42

San Diego $12174 $11689 -4 $12403 2 $13703 13 $12895 6

with travel costs $18989 36 $23003 47 $21203 43 $23895 49 Fare comparison based on 2013 Department of Transportation data

bull HorizonAlaska airfares are competitive with other regional airports

bull Add the cost to travel to and from other bay area airports (IRS $054mile) and the fares from STS save the average traveler 24-49

Current Passengers and Growth Potential

Market Annual Actual Total Round Trip Current Growth STS Passengers Passengers Capture Rate Potential

STS-LAX 85213 372030 229 63599

STS-SAN 40265 143161 281 31316

STS-SEA 39711 113852 349 17215

STS-PDX 29638 82057 361 11391

Passenger data for YE June 30 2014

Airline Industry Overview ndash Potential Markets Airport Outbound Round Trip Total Round Trip Potential STS

Passengers Passengers Passengers Guadalajara 135268 193433 52227 Denver 76720 153440 41429 Las Vegas 64080 76244 30498 Honolulu 55918 111836 35788 Phoenix 50224 100448 32143 Maui 43290 86580 27706 Salt Lake City 34894 69788 24426 New York - JFK 157972 315944 85305 Chicago 120596 241192 65122 Boston 99644 199290 53808 New York - EWR 91834 183688 49596 Atlanta 88256 176514 47659 Mexico City 80080 106500 28755 Dallas-Fort Worth 78548 157096 42416 London 71760 143520 38750 Puerto Vallarta 68766 88020 23765 Houston 64970 129940 35084 Paris 63510 127020 34295 Washington DC 62780 125560 33901 Fort Lauderdale 57086 114172 30826 Kona 53364 106728 34153 Kauai 42486 84972 27191 Bookings data for YE 6-30-14

Airports Used by Sonoma County and Surrounding Area Residents

Share of Passenger Bookings ndash All Airlines

Oakland Sacramento 7 5

STS 2

San jose 1

San Francisco 85

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Airfield Layout Plan Land Use and Boundaries

Airport Update

Airport Update ndash Fuel (Gallons Sold) 3000000 6000

2010 2011 2012 2013 2014 2015 000

1000

2000

3000

4000

5000

shy

500000

1000000

1500000

2000000

2500000

Gal

lons

Airport Update ndash Parking Revenues $1000000 5000

000

500

1000

1500

2000

2500

3000

3500

4000

4500

$shy

$100000

$200000

$300000

$400000

$500000

$600000

$700000

$800000

$900000

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

Airport Update ndash Rental Cars Revenues $6000000 4500

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

000

500

1000

1500

2000

2500

3000

3500

4000

$shy

$1000000

$2000000

$3000000

$4000000

$5000000

Airport Updates ndash Passenger Levels

Airport Update - HorizonAlaska Airlines

bull STS is an integral part of the Horizon AirAlaska Airlines market strategy

bull 65 of Horizon Airrsquos total capacity operates out of STS

bull STS is the 14th busiest Airport in the Horizon network (out of 45 destinations)

bull STS is the 6th largest market by available seat miles flown (Seattle Portland Boise Spokane Reno Santa Rosa)

bull Each new flight added by Horizon has quickly sold at near seat capacity

bull Other airlines have noted STSrsquos ability to absorb new seat capacity

Airline Economic Impacts of STS

bull Alaskarsquos seven daily flights represents approximately bull $161 million economic impact bull 490 jobs in the community

bull Anticipate 14 to 16 commercial flights per day by summer of 2021

bull 16 daily flights represents approximately bull $368 million economic impact bull 1120 jobs in the community

bull Every new flight generates approximately a $23 million economic impact and 70 jobs in the community

bull The average visitor to Sonoma County spends $44298 per day

Fare Comparison for STS and Other Airports in the Region STS San Francisco Oakland San Jose Sacramento

Destination Avg Fare Avg Fare Diff Avg Fare Diff Avg Fare Diff Avg Fare Diff

Los Angeles $12096 $11167 -8 $11754 -3 $11030 -9 $12950 7

with travel costs $18467 34 $22354 46 $18530 35 $23950 49

Seattle $16548 $14379 -13 $13248 -20 $14289 -14 $14704 -11

with travel costs $21679 24 $23848 31 $21789 24 $25704 36

Portland $12952 $12240 -5 $12289 -5 $13342 3 $11302 -13

with travel costs $19540 34 $22889 43 $20842 38 $22302 42

San Diego $12174 $11689 -4 $12403 2 $13703 13 $12895 6

with travel costs $18989 36 $23003 47 $21203 43 $23895 49 Fare comparison based on 2013 Department of Transportation data

bull HorizonAlaska airfares are competitive with other regional airports

bull Add the cost to travel to and from other bay area airports (IRS $054mile) and the fares from STS save the average traveler 24-49

Current Passengers and Growth Potential

Market Annual Actual Total Round Trip Current Growth STS Passengers Passengers Capture Rate Potential

STS-LAX 85213 372030 229 63599

STS-SAN 40265 143161 281 31316

STS-SEA 39711 113852 349 17215

STS-PDX 29638 82057 361 11391

Passenger data for YE June 30 2014

Airline Industry Overview ndash Potential Markets Airport Outbound Round Trip Total Round Trip Potential STS

Passengers Passengers Passengers Guadalajara 135268 193433 52227 Denver 76720 153440 41429 Las Vegas 64080 76244 30498 Honolulu 55918 111836 35788 Phoenix 50224 100448 32143 Maui 43290 86580 27706 Salt Lake City 34894 69788 24426 New York - JFK 157972 315944 85305 Chicago 120596 241192 65122 Boston 99644 199290 53808 New York - EWR 91834 183688 49596 Atlanta 88256 176514 47659 Mexico City 80080 106500 28755 Dallas-Fort Worth 78548 157096 42416 London 71760 143520 38750 Puerto Vallarta 68766 88020 23765 Houston 64970 129940 35084 Paris 63510 127020 34295 Washington DC 62780 125560 33901 Fort Lauderdale 57086 114172 30826 Kona 53364 106728 34153 Kauai 42486 84972 27191 Bookings data for YE 6-30-14

Airports Used by Sonoma County and Surrounding Area Residents

Share of Passenger Bookings ndash All Airlines

Oakland Sacramento 7 5

STS 2

San jose 1

San Francisco 85

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Airport Update

Airport Update ndash Fuel (Gallons Sold) 3000000 6000

2010 2011 2012 2013 2014 2015 000

1000

2000

3000

4000

5000

shy

500000

1000000

1500000

2000000

2500000

Gal

lons

Airport Update ndash Parking Revenues $1000000 5000

000

500

1000

1500

2000

2500

3000

3500

4000

4500

$shy

$100000

$200000

$300000

$400000

$500000

$600000

$700000

$800000

$900000

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

Airport Update ndash Rental Cars Revenues $6000000 4500

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

000

500

1000

1500

2000

2500

3000

3500

4000

$shy

$1000000

$2000000

$3000000

$4000000

$5000000

Airport Updates ndash Passenger Levels

Airport Update - HorizonAlaska Airlines

bull STS is an integral part of the Horizon AirAlaska Airlines market strategy

bull 65 of Horizon Airrsquos total capacity operates out of STS

bull STS is the 14th busiest Airport in the Horizon network (out of 45 destinations)

bull STS is the 6th largest market by available seat miles flown (Seattle Portland Boise Spokane Reno Santa Rosa)

bull Each new flight added by Horizon has quickly sold at near seat capacity

bull Other airlines have noted STSrsquos ability to absorb new seat capacity

Airline Economic Impacts of STS

bull Alaskarsquos seven daily flights represents approximately bull $161 million economic impact bull 490 jobs in the community

bull Anticipate 14 to 16 commercial flights per day by summer of 2021

bull 16 daily flights represents approximately bull $368 million economic impact bull 1120 jobs in the community

bull Every new flight generates approximately a $23 million economic impact and 70 jobs in the community

bull The average visitor to Sonoma County spends $44298 per day

Fare Comparison for STS and Other Airports in the Region STS San Francisco Oakland San Jose Sacramento

Destination Avg Fare Avg Fare Diff Avg Fare Diff Avg Fare Diff Avg Fare Diff

Los Angeles $12096 $11167 -8 $11754 -3 $11030 -9 $12950 7

with travel costs $18467 34 $22354 46 $18530 35 $23950 49

Seattle $16548 $14379 -13 $13248 -20 $14289 -14 $14704 -11

with travel costs $21679 24 $23848 31 $21789 24 $25704 36

Portland $12952 $12240 -5 $12289 -5 $13342 3 $11302 -13

with travel costs $19540 34 $22889 43 $20842 38 $22302 42

San Diego $12174 $11689 -4 $12403 2 $13703 13 $12895 6

with travel costs $18989 36 $23003 47 $21203 43 $23895 49 Fare comparison based on 2013 Department of Transportation data

bull HorizonAlaska airfares are competitive with other regional airports

bull Add the cost to travel to and from other bay area airports (IRS $054mile) and the fares from STS save the average traveler 24-49

Current Passengers and Growth Potential

Market Annual Actual Total Round Trip Current Growth STS Passengers Passengers Capture Rate Potential

STS-LAX 85213 372030 229 63599

STS-SAN 40265 143161 281 31316

STS-SEA 39711 113852 349 17215

STS-PDX 29638 82057 361 11391

Passenger data for YE June 30 2014

Airline Industry Overview ndash Potential Markets Airport Outbound Round Trip Total Round Trip Potential STS

Passengers Passengers Passengers Guadalajara 135268 193433 52227 Denver 76720 153440 41429 Las Vegas 64080 76244 30498 Honolulu 55918 111836 35788 Phoenix 50224 100448 32143 Maui 43290 86580 27706 Salt Lake City 34894 69788 24426 New York - JFK 157972 315944 85305 Chicago 120596 241192 65122 Boston 99644 199290 53808 New York - EWR 91834 183688 49596 Atlanta 88256 176514 47659 Mexico City 80080 106500 28755 Dallas-Fort Worth 78548 157096 42416 London 71760 143520 38750 Puerto Vallarta 68766 88020 23765 Houston 64970 129940 35084 Paris 63510 127020 34295 Washington DC 62780 125560 33901 Fort Lauderdale 57086 114172 30826 Kona 53364 106728 34153 Kauai 42486 84972 27191 Bookings data for YE 6-30-14

Airports Used by Sonoma County and Surrounding Area Residents

Share of Passenger Bookings ndash All Airlines

Oakland Sacramento 7 5

STS 2

San jose 1

San Francisco 85

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Airport Update ndash Fuel (Gallons Sold) 3000000 6000

2010 2011 2012 2013 2014 2015 000

1000

2000

3000

4000

5000

shy

500000

1000000

1500000

2000000

2500000

Gal

lons

Airport Update ndash Parking Revenues $1000000 5000

000

500

1000

1500

2000

2500

3000

3500

4000

4500

$shy

$100000

$200000

$300000

$400000

$500000

$600000

$700000

$800000

$900000

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

Airport Update ndash Rental Cars Revenues $6000000 4500

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

000

500

1000

1500

2000

2500

3000

3500

4000

$shy

$1000000

$2000000

$3000000

$4000000

$5000000

Airport Updates ndash Passenger Levels

Airport Update - HorizonAlaska Airlines

bull STS is an integral part of the Horizon AirAlaska Airlines market strategy

bull 65 of Horizon Airrsquos total capacity operates out of STS

bull STS is the 14th busiest Airport in the Horizon network (out of 45 destinations)

bull STS is the 6th largest market by available seat miles flown (Seattle Portland Boise Spokane Reno Santa Rosa)

bull Each new flight added by Horizon has quickly sold at near seat capacity

bull Other airlines have noted STSrsquos ability to absorb new seat capacity

Airline Economic Impacts of STS

bull Alaskarsquos seven daily flights represents approximately bull $161 million economic impact bull 490 jobs in the community

bull Anticipate 14 to 16 commercial flights per day by summer of 2021

bull 16 daily flights represents approximately bull $368 million economic impact bull 1120 jobs in the community

bull Every new flight generates approximately a $23 million economic impact and 70 jobs in the community

bull The average visitor to Sonoma County spends $44298 per day

Fare Comparison for STS and Other Airports in the Region STS San Francisco Oakland San Jose Sacramento

Destination Avg Fare Avg Fare Diff Avg Fare Diff Avg Fare Diff Avg Fare Diff

Los Angeles $12096 $11167 -8 $11754 -3 $11030 -9 $12950 7

with travel costs $18467 34 $22354 46 $18530 35 $23950 49

Seattle $16548 $14379 -13 $13248 -20 $14289 -14 $14704 -11

with travel costs $21679 24 $23848 31 $21789 24 $25704 36

Portland $12952 $12240 -5 $12289 -5 $13342 3 $11302 -13

with travel costs $19540 34 $22889 43 $20842 38 $22302 42

San Diego $12174 $11689 -4 $12403 2 $13703 13 $12895 6

with travel costs $18989 36 $23003 47 $21203 43 $23895 49 Fare comparison based on 2013 Department of Transportation data

bull HorizonAlaska airfares are competitive with other regional airports

bull Add the cost to travel to and from other bay area airports (IRS $054mile) and the fares from STS save the average traveler 24-49

Current Passengers and Growth Potential

Market Annual Actual Total Round Trip Current Growth STS Passengers Passengers Capture Rate Potential

STS-LAX 85213 372030 229 63599

STS-SAN 40265 143161 281 31316

STS-SEA 39711 113852 349 17215

STS-PDX 29638 82057 361 11391

Passenger data for YE June 30 2014

Airline Industry Overview ndash Potential Markets Airport Outbound Round Trip Total Round Trip Potential STS

Passengers Passengers Passengers Guadalajara 135268 193433 52227 Denver 76720 153440 41429 Las Vegas 64080 76244 30498 Honolulu 55918 111836 35788 Phoenix 50224 100448 32143 Maui 43290 86580 27706 Salt Lake City 34894 69788 24426 New York - JFK 157972 315944 85305 Chicago 120596 241192 65122 Boston 99644 199290 53808 New York - EWR 91834 183688 49596 Atlanta 88256 176514 47659 Mexico City 80080 106500 28755 Dallas-Fort Worth 78548 157096 42416 London 71760 143520 38750 Puerto Vallarta 68766 88020 23765 Houston 64970 129940 35084 Paris 63510 127020 34295 Washington DC 62780 125560 33901 Fort Lauderdale 57086 114172 30826 Kona 53364 106728 34153 Kauai 42486 84972 27191 Bookings data for YE 6-30-14

Airports Used by Sonoma County and Surrounding Area Residents

Share of Passenger Bookings ndash All Airlines

Oakland Sacramento 7 5

STS 2

San jose 1

San Francisco 85

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Airport Update ndash Parking Revenues $1000000 5000

000

500

1000

1500

2000

2500

3000

3500

4000

4500

$shy

$100000

$200000

$300000

$400000

$500000

$600000

$700000

$800000

$900000

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

Airport Update ndash Rental Cars Revenues $6000000 4500

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

000

500

1000

1500

2000

2500

3000

3500

4000

$shy

$1000000

$2000000

$3000000

$4000000

$5000000

Airport Updates ndash Passenger Levels

Airport Update - HorizonAlaska Airlines

bull STS is an integral part of the Horizon AirAlaska Airlines market strategy

bull 65 of Horizon Airrsquos total capacity operates out of STS

bull STS is the 14th busiest Airport in the Horizon network (out of 45 destinations)

bull STS is the 6th largest market by available seat miles flown (Seattle Portland Boise Spokane Reno Santa Rosa)

bull Each new flight added by Horizon has quickly sold at near seat capacity

bull Other airlines have noted STSrsquos ability to absorb new seat capacity

Airline Economic Impacts of STS

bull Alaskarsquos seven daily flights represents approximately bull $161 million economic impact bull 490 jobs in the community

bull Anticipate 14 to 16 commercial flights per day by summer of 2021

bull 16 daily flights represents approximately bull $368 million economic impact bull 1120 jobs in the community

bull Every new flight generates approximately a $23 million economic impact and 70 jobs in the community

bull The average visitor to Sonoma County spends $44298 per day

Fare Comparison for STS and Other Airports in the Region STS San Francisco Oakland San Jose Sacramento

Destination Avg Fare Avg Fare Diff Avg Fare Diff Avg Fare Diff Avg Fare Diff

Los Angeles $12096 $11167 -8 $11754 -3 $11030 -9 $12950 7

with travel costs $18467 34 $22354 46 $18530 35 $23950 49

Seattle $16548 $14379 -13 $13248 -20 $14289 -14 $14704 -11

with travel costs $21679 24 $23848 31 $21789 24 $25704 36

Portland $12952 $12240 -5 $12289 -5 $13342 3 $11302 -13

with travel costs $19540 34 $22889 43 $20842 38 $22302 42

San Diego $12174 $11689 -4 $12403 2 $13703 13 $12895 6

with travel costs $18989 36 $23003 47 $21203 43 $23895 49 Fare comparison based on 2013 Department of Transportation data

bull HorizonAlaska airfares are competitive with other regional airports

bull Add the cost to travel to and from other bay area airports (IRS $054mile) and the fares from STS save the average traveler 24-49

Current Passengers and Growth Potential

Market Annual Actual Total Round Trip Current Growth STS Passengers Passengers Capture Rate Potential

STS-LAX 85213 372030 229 63599

STS-SAN 40265 143161 281 31316

STS-SEA 39711 113852 349 17215

STS-PDX 29638 82057 361 11391

Passenger data for YE June 30 2014

Airline Industry Overview ndash Potential Markets Airport Outbound Round Trip Total Round Trip Potential STS

Passengers Passengers Passengers Guadalajara 135268 193433 52227 Denver 76720 153440 41429 Las Vegas 64080 76244 30498 Honolulu 55918 111836 35788 Phoenix 50224 100448 32143 Maui 43290 86580 27706 Salt Lake City 34894 69788 24426 New York - JFK 157972 315944 85305 Chicago 120596 241192 65122 Boston 99644 199290 53808 New York - EWR 91834 183688 49596 Atlanta 88256 176514 47659 Mexico City 80080 106500 28755 Dallas-Fort Worth 78548 157096 42416 London 71760 143520 38750 Puerto Vallarta 68766 88020 23765 Houston 64970 129940 35084 Paris 63510 127020 34295 Washington DC 62780 125560 33901 Fort Lauderdale 57086 114172 30826 Kona 53364 106728 34153 Kauai 42486 84972 27191 Bookings data for YE 6-30-14

Airports Used by Sonoma County and Surrounding Area Residents

Share of Passenger Bookings ndash All Airlines

Oakland Sacramento 7 5

STS 2

San jose 1

San Francisco 85

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Airport Update ndash Rental Cars Revenues $6000000 4500

2010 2011 2012 2013 2014 2015

Actuals Projected Percentage Change

000

500

1000

1500

2000

2500

3000

3500

4000

$shy

$1000000

$2000000

$3000000

$4000000

$5000000

Airport Updates ndash Passenger Levels

Airport Update - HorizonAlaska Airlines

bull STS is an integral part of the Horizon AirAlaska Airlines market strategy

bull 65 of Horizon Airrsquos total capacity operates out of STS

bull STS is the 14th busiest Airport in the Horizon network (out of 45 destinations)

bull STS is the 6th largest market by available seat miles flown (Seattle Portland Boise Spokane Reno Santa Rosa)

bull Each new flight added by Horizon has quickly sold at near seat capacity

bull Other airlines have noted STSrsquos ability to absorb new seat capacity

Airline Economic Impacts of STS

bull Alaskarsquos seven daily flights represents approximately bull $161 million economic impact bull 490 jobs in the community

bull Anticipate 14 to 16 commercial flights per day by summer of 2021

bull 16 daily flights represents approximately bull $368 million economic impact bull 1120 jobs in the community

bull Every new flight generates approximately a $23 million economic impact and 70 jobs in the community

bull The average visitor to Sonoma County spends $44298 per day

Fare Comparison for STS and Other Airports in the Region STS San Francisco Oakland San Jose Sacramento

Destination Avg Fare Avg Fare Diff Avg Fare Diff Avg Fare Diff Avg Fare Diff

Los Angeles $12096 $11167 -8 $11754 -3 $11030 -9 $12950 7

with travel costs $18467 34 $22354 46 $18530 35 $23950 49

Seattle $16548 $14379 -13 $13248 -20 $14289 -14 $14704 -11

with travel costs $21679 24 $23848 31 $21789 24 $25704 36

Portland $12952 $12240 -5 $12289 -5 $13342 3 $11302 -13

with travel costs $19540 34 $22889 43 $20842 38 $22302 42

San Diego $12174 $11689 -4 $12403 2 $13703 13 $12895 6

with travel costs $18989 36 $23003 47 $21203 43 $23895 49 Fare comparison based on 2013 Department of Transportation data

bull HorizonAlaska airfares are competitive with other regional airports

bull Add the cost to travel to and from other bay area airports (IRS $054mile) and the fares from STS save the average traveler 24-49

Current Passengers and Growth Potential

Market Annual Actual Total Round Trip Current Growth STS Passengers Passengers Capture Rate Potential

STS-LAX 85213 372030 229 63599

STS-SAN 40265 143161 281 31316

STS-SEA 39711 113852 349 17215

STS-PDX 29638 82057 361 11391

Passenger data for YE June 30 2014

Airline Industry Overview ndash Potential Markets Airport Outbound Round Trip Total Round Trip Potential STS

Passengers Passengers Passengers Guadalajara 135268 193433 52227 Denver 76720 153440 41429 Las Vegas 64080 76244 30498 Honolulu 55918 111836 35788 Phoenix 50224 100448 32143 Maui 43290 86580 27706 Salt Lake City 34894 69788 24426 New York - JFK 157972 315944 85305 Chicago 120596 241192 65122 Boston 99644 199290 53808 New York - EWR 91834 183688 49596 Atlanta 88256 176514 47659 Mexico City 80080 106500 28755 Dallas-Fort Worth 78548 157096 42416 London 71760 143520 38750 Puerto Vallarta 68766 88020 23765 Houston 64970 129940 35084 Paris 63510 127020 34295 Washington DC 62780 125560 33901 Fort Lauderdale 57086 114172 30826 Kona 53364 106728 34153 Kauai 42486 84972 27191 Bookings data for YE 6-30-14

Airports Used by Sonoma County and Surrounding Area Residents

Share of Passenger Bookings ndash All Airlines

Oakland Sacramento 7 5

STS 2

San jose 1

San Francisco 85

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Airport Updates ndash Passenger Levels

Airport Update - HorizonAlaska Airlines

bull STS is an integral part of the Horizon AirAlaska Airlines market strategy

bull 65 of Horizon Airrsquos total capacity operates out of STS

bull STS is the 14th busiest Airport in the Horizon network (out of 45 destinations)

bull STS is the 6th largest market by available seat miles flown (Seattle Portland Boise Spokane Reno Santa Rosa)

bull Each new flight added by Horizon has quickly sold at near seat capacity

bull Other airlines have noted STSrsquos ability to absorb new seat capacity

Airline Economic Impacts of STS

bull Alaskarsquos seven daily flights represents approximately bull $161 million economic impact bull 490 jobs in the community

bull Anticipate 14 to 16 commercial flights per day by summer of 2021

bull 16 daily flights represents approximately bull $368 million economic impact bull 1120 jobs in the community

bull Every new flight generates approximately a $23 million economic impact and 70 jobs in the community

bull The average visitor to Sonoma County spends $44298 per day

Fare Comparison for STS and Other Airports in the Region STS San Francisco Oakland San Jose Sacramento

Destination Avg Fare Avg Fare Diff Avg Fare Diff Avg Fare Diff Avg Fare Diff

Los Angeles $12096 $11167 -8 $11754 -3 $11030 -9 $12950 7

with travel costs $18467 34 $22354 46 $18530 35 $23950 49

Seattle $16548 $14379 -13 $13248 -20 $14289 -14 $14704 -11

with travel costs $21679 24 $23848 31 $21789 24 $25704 36

Portland $12952 $12240 -5 $12289 -5 $13342 3 $11302 -13

with travel costs $19540 34 $22889 43 $20842 38 $22302 42

San Diego $12174 $11689 -4 $12403 2 $13703 13 $12895 6

with travel costs $18989 36 $23003 47 $21203 43 $23895 49 Fare comparison based on 2013 Department of Transportation data

bull HorizonAlaska airfares are competitive with other regional airports

bull Add the cost to travel to and from other bay area airports (IRS $054mile) and the fares from STS save the average traveler 24-49

Current Passengers and Growth Potential

Market Annual Actual Total Round Trip Current Growth STS Passengers Passengers Capture Rate Potential

STS-LAX 85213 372030 229 63599

STS-SAN 40265 143161 281 31316

STS-SEA 39711 113852 349 17215

STS-PDX 29638 82057 361 11391

Passenger data for YE June 30 2014

Airline Industry Overview ndash Potential Markets Airport Outbound Round Trip Total Round Trip Potential STS

Passengers Passengers Passengers Guadalajara 135268 193433 52227 Denver 76720 153440 41429 Las Vegas 64080 76244 30498 Honolulu 55918 111836 35788 Phoenix 50224 100448 32143 Maui 43290 86580 27706 Salt Lake City 34894 69788 24426 New York - JFK 157972 315944 85305 Chicago 120596 241192 65122 Boston 99644 199290 53808 New York - EWR 91834 183688 49596 Atlanta 88256 176514 47659 Mexico City 80080 106500 28755 Dallas-Fort Worth 78548 157096 42416 London 71760 143520 38750 Puerto Vallarta 68766 88020 23765 Houston 64970 129940 35084 Paris 63510 127020 34295 Washington DC 62780 125560 33901 Fort Lauderdale 57086 114172 30826 Kona 53364 106728 34153 Kauai 42486 84972 27191 Bookings data for YE 6-30-14

Airports Used by Sonoma County and Surrounding Area Residents

Share of Passenger Bookings ndash All Airlines

Oakland Sacramento 7 5

STS 2

San jose 1

San Francisco 85

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Airport Update - HorizonAlaska Airlines

bull STS is an integral part of the Horizon AirAlaska Airlines market strategy

bull 65 of Horizon Airrsquos total capacity operates out of STS

bull STS is the 14th busiest Airport in the Horizon network (out of 45 destinations)

bull STS is the 6th largest market by available seat miles flown (Seattle Portland Boise Spokane Reno Santa Rosa)

bull Each new flight added by Horizon has quickly sold at near seat capacity

bull Other airlines have noted STSrsquos ability to absorb new seat capacity

Airline Economic Impacts of STS

bull Alaskarsquos seven daily flights represents approximately bull $161 million economic impact bull 490 jobs in the community

bull Anticipate 14 to 16 commercial flights per day by summer of 2021

bull 16 daily flights represents approximately bull $368 million economic impact bull 1120 jobs in the community

bull Every new flight generates approximately a $23 million economic impact and 70 jobs in the community

bull The average visitor to Sonoma County spends $44298 per day

Fare Comparison for STS and Other Airports in the Region STS San Francisco Oakland San Jose Sacramento

Destination Avg Fare Avg Fare Diff Avg Fare Diff Avg Fare Diff Avg Fare Diff

Los Angeles $12096 $11167 -8 $11754 -3 $11030 -9 $12950 7

with travel costs $18467 34 $22354 46 $18530 35 $23950 49

Seattle $16548 $14379 -13 $13248 -20 $14289 -14 $14704 -11

with travel costs $21679 24 $23848 31 $21789 24 $25704 36

Portland $12952 $12240 -5 $12289 -5 $13342 3 $11302 -13

with travel costs $19540 34 $22889 43 $20842 38 $22302 42

San Diego $12174 $11689 -4 $12403 2 $13703 13 $12895 6

with travel costs $18989 36 $23003 47 $21203 43 $23895 49 Fare comparison based on 2013 Department of Transportation data

bull HorizonAlaska airfares are competitive with other regional airports

bull Add the cost to travel to and from other bay area airports (IRS $054mile) and the fares from STS save the average traveler 24-49

Current Passengers and Growth Potential

Market Annual Actual Total Round Trip Current Growth STS Passengers Passengers Capture Rate Potential

STS-LAX 85213 372030 229 63599

STS-SAN 40265 143161 281 31316

STS-SEA 39711 113852 349 17215

STS-PDX 29638 82057 361 11391

Passenger data for YE June 30 2014

Airline Industry Overview ndash Potential Markets Airport Outbound Round Trip Total Round Trip Potential STS

Passengers Passengers Passengers Guadalajara 135268 193433 52227 Denver 76720 153440 41429 Las Vegas 64080 76244 30498 Honolulu 55918 111836 35788 Phoenix 50224 100448 32143 Maui 43290 86580 27706 Salt Lake City 34894 69788 24426 New York - JFK 157972 315944 85305 Chicago 120596 241192 65122 Boston 99644 199290 53808 New York - EWR 91834 183688 49596 Atlanta 88256 176514 47659 Mexico City 80080 106500 28755 Dallas-Fort Worth 78548 157096 42416 London 71760 143520 38750 Puerto Vallarta 68766 88020 23765 Houston 64970 129940 35084 Paris 63510 127020 34295 Washington DC 62780 125560 33901 Fort Lauderdale 57086 114172 30826 Kona 53364 106728 34153 Kauai 42486 84972 27191 Bookings data for YE 6-30-14

Airports Used by Sonoma County and Surrounding Area Residents

Share of Passenger Bookings ndash All Airlines

Oakland Sacramento 7 5

STS 2

San jose 1

San Francisco 85

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Airline Economic Impacts of STS

bull Alaskarsquos seven daily flights represents approximately bull $161 million economic impact bull 490 jobs in the community

bull Anticipate 14 to 16 commercial flights per day by summer of 2021

bull 16 daily flights represents approximately bull $368 million economic impact bull 1120 jobs in the community

bull Every new flight generates approximately a $23 million economic impact and 70 jobs in the community

bull The average visitor to Sonoma County spends $44298 per day

Fare Comparison for STS and Other Airports in the Region STS San Francisco Oakland San Jose Sacramento

Destination Avg Fare Avg Fare Diff Avg Fare Diff Avg Fare Diff Avg Fare Diff

Los Angeles $12096 $11167 -8 $11754 -3 $11030 -9 $12950 7

with travel costs $18467 34 $22354 46 $18530 35 $23950 49

Seattle $16548 $14379 -13 $13248 -20 $14289 -14 $14704 -11

with travel costs $21679 24 $23848 31 $21789 24 $25704 36

Portland $12952 $12240 -5 $12289 -5 $13342 3 $11302 -13

with travel costs $19540 34 $22889 43 $20842 38 $22302 42

San Diego $12174 $11689 -4 $12403 2 $13703 13 $12895 6

with travel costs $18989 36 $23003 47 $21203 43 $23895 49 Fare comparison based on 2013 Department of Transportation data

bull HorizonAlaska airfares are competitive with other regional airports

bull Add the cost to travel to and from other bay area airports (IRS $054mile) and the fares from STS save the average traveler 24-49

Current Passengers and Growth Potential

Market Annual Actual Total Round Trip Current Growth STS Passengers Passengers Capture Rate Potential

STS-LAX 85213 372030 229 63599

STS-SAN 40265 143161 281 31316

STS-SEA 39711 113852 349 17215

STS-PDX 29638 82057 361 11391

Passenger data for YE June 30 2014

Airline Industry Overview ndash Potential Markets Airport Outbound Round Trip Total Round Trip Potential STS

Passengers Passengers Passengers Guadalajara 135268 193433 52227 Denver 76720 153440 41429 Las Vegas 64080 76244 30498 Honolulu 55918 111836 35788 Phoenix 50224 100448 32143 Maui 43290 86580 27706 Salt Lake City 34894 69788 24426 New York - JFK 157972 315944 85305 Chicago 120596 241192 65122 Boston 99644 199290 53808 New York - EWR 91834 183688 49596 Atlanta 88256 176514 47659 Mexico City 80080 106500 28755 Dallas-Fort Worth 78548 157096 42416 London 71760 143520 38750 Puerto Vallarta 68766 88020 23765 Houston 64970 129940 35084 Paris 63510 127020 34295 Washington DC 62780 125560 33901 Fort Lauderdale 57086 114172 30826 Kona 53364 106728 34153 Kauai 42486 84972 27191 Bookings data for YE 6-30-14

Airports Used by Sonoma County and Surrounding Area Residents

Share of Passenger Bookings ndash All Airlines

Oakland Sacramento 7 5

STS 2

San jose 1

San Francisco 85

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Fare Comparison for STS and Other Airports in the Region STS San Francisco Oakland San Jose Sacramento

Destination Avg Fare Avg Fare Diff Avg Fare Diff Avg Fare Diff Avg Fare Diff

Los Angeles $12096 $11167 -8 $11754 -3 $11030 -9 $12950 7

with travel costs $18467 34 $22354 46 $18530 35 $23950 49

Seattle $16548 $14379 -13 $13248 -20 $14289 -14 $14704 -11

with travel costs $21679 24 $23848 31 $21789 24 $25704 36

Portland $12952 $12240 -5 $12289 -5 $13342 3 $11302 -13

with travel costs $19540 34 $22889 43 $20842 38 $22302 42

San Diego $12174 $11689 -4 $12403 2 $13703 13 $12895 6

with travel costs $18989 36 $23003 47 $21203 43 $23895 49 Fare comparison based on 2013 Department of Transportation data

bull HorizonAlaska airfares are competitive with other regional airports

bull Add the cost to travel to and from other bay area airports (IRS $054mile) and the fares from STS save the average traveler 24-49

Current Passengers and Growth Potential

Market Annual Actual Total Round Trip Current Growth STS Passengers Passengers Capture Rate Potential

STS-LAX 85213 372030 229 63599

STS-SAN 40265 143161 281 31316

STS-SEA 39711 113852 349 17215

STS-PDX 29638 82057 361 11391

Passenger data for YE June 30 2014

Airline Industry Overview ndash Potential Markets Airport Outbound Round Trip Total Round Trip Potential STS

Passengers Passengers Passengers Guadalajara 135268 193433 52227 Denver 76720 153440 41429 Las Vegas 64080 76244 30498 Honolulu 55918 111836 35788 Phoenix 50224 100448 32143 Maui 43290 86580 27706 Salt Lake City 34894 69788 24426 New York - JFK 157972 315944 85305 Chicago 120596 241192 65122 Boston 99644 199290 53808 New York - EWR 91834 183688 49596 Atlanta 88256 176514 47659 Mexico City 80080 106500 28755 Dallas-Fort Worth 78548 157096 42416 London 71760 143520 38750 Puerto Vallarta 68766 88020 23765 Houston 64970 129940 35084 Paris 63510 127020 34295 Washington DC 62780 125560 33901 Fort Lauderdale 57086 114172 30826 Kona 53364 106728 34153 Kauai 42486 84972 27191 Bookings data for YE 6-30-14

Airports Used by Sonoma County and Surrounding Area Residents

Share of Passenger Bookings ndash All Airlines

Oakland Sacramento 7 5

STS 2

San jose 1

San Francisco 85

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Current Passengers and Growth Potential

Market Annual Actual Total Round Trip Current Growth STS Passengers Passengers Capture Rate Potential

STS-LAX 85213 372030 229 63599

STS-SAN 40265 143161 281 31316

STS-SEA 39711 113852 349 17215

STS-PDX 29638 82057 361 11391

Passenger data for YE June 30 2014

Airline Industry Overview ndash Potential Markets Airport Outbound Round Trip Total Round Trip Potential STS

Passengers Passengers Passengers Guadalajara 135268 193433 52227 Denver 76720 153440 41429 Las Vegas 64080 76244 30498 Honolulu 55918 111836 35788 Phoenix 50224 100448 32143 Maui 43290 86580 27706 Salt Lake City 34894 69788 24426 New York - JFK 157972 315944 85305 Chicago 120596 241192 65122 Boston 99644 199290 53808 New York - EWR 91834 183688 49596 Atlanta 88256 176514 47659 Mexico City 80080 106500 28755 Dallas-Fort Worth 78548 157096 42416 London 71760 143520 38750 Puerto Vallarta 68766 88020 23765 Houston 64970 129940 35084 Paris 63510 127020 34295 Washington DC 62780 125560 33901 Fort Lauderdale 57086 114172 30826 Kona 53364 106728 34153 Kauai 42486 84972 27191 Bookings data for YE 6-30-14

Airports Used by Sonoma County and Surrounding Area Residents

Share of Passenger Bookings ndash All Airlines

Oakland Sacramento 7 5

STS 2

San jose 1

San Francisco 85

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Airline Industry Overview ndash Potential Markets Airport Outbound Round Trip Total Round Trip Potential STS

Passengers Passengers Passengers Guadalajara 135268 193433 52227 Denver 76720 153440 41429 Las Vegas 64080 76244 30498 Honolulu 55918 111836 35788 Phoenix 50224 100448 32143 Maui 43290 86580 27706 Salt Lake City 34894 69788 24426 New York - JFK 157972 315944 85305 Chicago 120596 241192 65122 Boston 99644 199290 53808 New York - EWR 91834 183688 49596 Atlanta 88256 176514 47659 Mexico City 80080 106500 28755 Dallas-Fort Worth 78548 157096 42416 London 71760 143520 38750 Puerto Vallarta 68766 88020 23765 Houston 64970 129940 35084 Paris 63510 127020 34295 Washington DC 62780 125560 33901 Fort Lauderdale 57086 114172 30826 Kona 53364 106728 34153 Kauai 42486 84972 27191 Bookings data for YE 6-30-14

Airports Used by Sonoma County and Surrounding Area Residents

Share of Passenger Bookings ndash All Airlines

Oakland Sacramento 7 5

STS 2

San jose 1

San Francisco 85

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Airports Used by Sonoma County and Surrounding Area Residents

Share of Passenger Bookings ndash All Airlines

Oakland Sacramento 7 5

STS 2

San jose 1

San Francisco 85

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Percentage Share Of Passengers For Bay Area Airports By Airline

Other US AlaskaHorizon 3 American Airlines

6 13

International Delta Air Lines 13 8

Southwest Virgin America 5

4

United Airlines 48

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Airline Industry Overview 4 Airlines (United Delta American and Southwest) control 83 of the

domestic airline capacity

Low cost carriers (LCCs such as Allegiant and Spirit) are growing at a faster rate than legacy carriers like Delta and United

Recent pilot regulations have increased the need for mainline pilots reducing the number of pilots available for regional markets like STS

Aircraft manufacturers are shifting production away from small (under 60 seat) jets

Non-hub airports similar to STS has seen a reduction in capacity (seats) to a point 17 below 2008 levels

STS has beat the trends compared to other non-hub airports and has increased available seats by over 17 of the 2008 levels

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Departing Seats STS vs Similar AirportsIndexed to CY 2008

20 170

15

10

5

0

-5

-10

-15

-20

STS 81 104

46

01

-63 -52 -37

-116 -164

-136 -170 -154 -151

-169

2008 2009 2010 2011 2012 2013 2014 2015 2016

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Airport Developments

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Development at STS

In October 2015 Board approved new lease with Sonoma Jet Center allowing for significant improvements and expansion of their current operations

The Airport has four (4) signed term sheets ndash

bull three (3) new leases to current leaseholders (VineJet PropJet and the Pacific Coast Air Museum)

bull a new lease with TruAir for the lease of the former Airport shop area for corporate aircraft charter service and flight school operations

In negotiations with Kaiser Air for a new lease to add a third hangar

Proposed improvements total over $13 million

Proposed improvements will generate between $200000 and $300000 in additional annual revenue for the Airport In addition tenants pay 11 possessory interest taxes ndash ex $10000000 based aircraft would pay $110000 per year

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Airfield Layout Plan

Developable Parcels

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Capital Project Needs

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Completed Projects

bull Remodeled existing terminal in 2010 adding 5000 square feet

bull Runway Safety Area Project added 885 feet of runway for a 6000 foot long runway

bull Rehabilitated the airline parking apron

bull Expanded rental car staging areas

bull Reconfigured the current long-term parking lot to expand parking spaces

bull Reconfigured and expanded the rental car return lot to double the parking spaces

bull Installed a new rental car wash system and vehicle detail area

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Future Capital Projects Runway Safety Area ndash Phase II ndash Service Roads

bull The service road portion of the project was removed from the main contract to match availability of federal funding

bull Construction is early FY16-17

bull Project was bid in August 2015 waiting for federal funding to award

bull Project estimate is $2 million

bull 9066 federally funded

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Runway Safety Area ndash Phase II ndash Service Roads

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Aircraft Rescue and Firefighting Building bull The current ARFF building was constructed in 1972 and no longer meets

current standards for either ARFF or ADA regulations

bull Location of current facility is in the way of long-term terminal expansion needs

bull A new location has not been selected conceptually studied in 2012 Airport Master Plan

bull The Airport plans to begin environmental studies for a new ARFF facility in FY 16-17 and the design phase could begin as early as FY 17-18 The Airport is waiting for FAA determination on NEPA documentation requirements

bull Preliminary project estimate is $7 to $8 million

bull Federal funding (90) should be available for this project

bull The funds to complete environment studies will be requested in the FY 16shy17 Airport Enterprise Budget request and for grant funding from the FAA

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Aircraft Rescue and Firefighting Building

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

New Long-term Parking Lot

bull Preliminary design was completed by Transportation and Public Works (PW) engineering staff for a new lot southeast of the terminal Final design will be completed by PW on-call Professional Engineering Service Providers

bull The current long-term lot exceeded capacity 5 times in 2015

bull Increasing to 8 daily flights in 2016 the long-term lot is expected to exceed capacity every weekend and holiday until the second lot can be constructed Each new flight creates the need for approximately 50 parking spots per day

bull The proposed parking lot would add approximately 440 parking spaces

bull Total cost estimated to be $38 to 46 million Can be built in one or two phases if constructed as one phase it would save approximately $650000

bull Staff is recommending construction as a single phase project

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

New long-term parking lot ndash Site location

Terminal

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Proposed Terminal Enhancement Project

bull Terminal design objectives included

bull Meeting immediate and near-term needs

bull Establish a project budget for near-term improvements that is affordable for the Airport

bull Design character that signifies its role as a gateway to the region

bull Phase expansion that does not impact current operations

bull Anticipating future needs and establish a pattern of design for future expansions

bull Proposed option contemplates less space versus FAA optimal space recommendations in order to match Airport financing ability and to maximize future expansion potential

bull Anticipated cost is $74 to $102 million and may be eligible for future FAA funding

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Existing Terminal

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Terminal Renovation ndash Phases I and II

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

New Holdroom (Phase II) ndash East Elevation

New Holdroom (Phase II) ndash South Elevation

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

New Holdroom Interior Looking East

New Holdroom Interior Looking North

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Flex Space ndash Conventional Construction ndash View from Airfield

Flex Space ndash Tent Option ndash View from Airfield

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Existing Terminal ndash View from Airfield Side

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Phase 1 Build Flex-space (either tent or conventional construction) and move hold room and security areas into the new facility Staff is recommending conventional construction (also shown is Phase 2a - move existing hold room north)

Tent option Phase I

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Phase 2 - Build new hold room and security area make connection to flex space and existing terminal and move hold room and security to new facility

Phase 3 - Relocate car rental agency booths and baggage claim to flex-space and construct canopy and circulation gallery at previous baggage claim area

Phase 4 - Remodel existing car rental agency booths and baggage claim area into new airline ticketing area and add new baggage drop-off belt system

Phase 5 - Remodel existing airline ticketing area into concession and office space and create new terminal vestibule

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Future Expansion ndash Estimated 2025

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Future Expansion ndash Estimated 2050

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Financial Analysis

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Financial Forecast bull In 2014 the Airport hired a firm specializing in airport business and

financial operations to prepare a financial forecasting model

bull This model forecasts operational levels and costs capital plan funding capacity sustainable airline fees and projects revenues for the next five years

bull The model converted the Airportrsquos budget into an industry standard format allocating costs to the appropriate cost centers This model confirmed the Airportrsquos assumption that the current airline rates and charges are insufficient to be sustainable and calculated the appropriate fees

bull The model incorporates revenue impacts as passenger volumes change and included projected other airport developments

bull The model includes expenditure impacts from the Airportrsquos Capital Improvement Plan (CPP) and staffing growth as outlined in the staffing analysis

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Airline Rates amp Charges

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Recommended Airline Fees bull The financial report recommended airline rates and charges approximately

double current levels

bull Airlines use a Cost Per Enplaned (CPE) passenger as their metric for airport costs (current CPE ~ $149 proposed CPE ~ $295)

bull The proposed fee increase has been discussed with and is acceptable to Alaska Airlines

bull Some airlines operate less than daily or irregular schedules and prefer a set ldquoper turnrdquo A set fee enables them to better budget station costs

bull With the potential for adding new less than daily service a new fee has been proposed for less than daily providers which includes a premium over daily rates and charges (consistent with industry standards)

bull Current Airline fees are $163 per square footper month for lobby (ticket counters and queue) and office space as well as a monthly fee of $363 for use of the securityhold room These fees will be deleted and a new fee structure will be established

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Recommended Airline Rates and Charges Terminal ndash Preferential Space Rental ndash assigned (NEW)

Daily Service $250 per square footper month Non-daily Service $325 per square footper month

Ticket Counter and Queue rental - unassigned (NEW) Daily Service $028 per Enplaned Passenger Non-daily Service $036 per Enplaned Passenger

Joint Use Space (NEW) Daily Service $160 per Enplaned Passenger Non-daily Service $208 per Enplaned Passenger

ldquoPer Turnrdquo Charge (NEW) ldquoPer turnrdquo charges are the sum of applicable non-daily rates and charges including landing fees use of applicable terminal spaces and equipment Calculated on aircraft weight and 90 of the seating capacity

The proposed fees are anticipated to increase revenues by $250000 annually

Staff agrees with the consultantrsquos recommended airline rates and charges

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Funding Options

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Current Airport Debt Maturity 2016 2016 2017 2018 2019 2020 2021

Airport Debt Summary Date Balance Payment Payment Payment Payment Payment Payment GAN ndash RSA Mar-16 1000000 14000 Hangar Construction Jun-16 109527 109527 Treasury Note ndash Apron Jul-16 2000000 28000 28000 GAN - RSA Mitigation Sep-17 3500000 49000 49000 Hangar Construction Jan-18 266693 122268 122268 30012 GAN - RSA II Apr-18 3000000 40000 40000 40000 Building Acquisition May-20 618809 147009 147009 147009 147009 59135 Runway Extension May-29 4359747 406935 406935 406935 406935 406935 406935 Total Annual Payment 916739 793212 623956 553944 466070 406935 Interest only payments Principal paid by grant funds

Total debt service costs will decrease by $362795 in 2019 and by $509804 in 2021

Funding Needs

bull $10 -14 million in long-term debt is needed for both the terminal and parking lot projects

bull The Airport is not able to absorb new debt payments until 2019 and will need either financial assistance or interim short-term financing (treasury notes)

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Funding Options ndash Long-term In working with Auditor Controller Treasurer Tax Collector (ACTTC) staff and their consultant KNN Public Finance (KNN) the Airport has explored several options for funding

bull Department of Transportation ndash Local Airport Loan Program bull The California Economic and Infrastructure Development Bank (IBank)

Infrastructure State Revolving Fund (ISRF) Program bull Airport Revenue Bonds bull County investment in the future (General Fund Contribution) bull A variable rate loan bull A conventional fixed rate loan ndash staff recommended option

The KNN report identified the most viable option for funding is a conventional fixed rate loan using the Countyrsquos credit

Staff is recommending this option and requests direction from the Board to allow further analysis on this option The Airport will return to the Board with final recommendations for both short-term and long-term funding solutions

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Staffing Analysis

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Staffing Report bull The Airport working with the Human Resources Department (HR) conducted

an assessment of staffing for current needs and forecasted Airport growth over the next five years

bull This assessment identified the need for four additional positions in the short-term and more staff positions in the long-term The specific job classifications still need to be coordinated with HR

bull The Airport will address the recommended short-term staffing changes as part of the budgetary process and as funding allows

bull ARFF coverage is currently provided by the Airport Operations staff who meet the FAA training requirement for those duties

bull Future information gathered regarding contracting ARFF services will assist with the needs assessment for long-term staffing If ARFF services are contracted fewer dedicated Airport staff will be needed

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Aircraft Rescue and Firefighting (ARFF) Services bull Airport staff dedicates 825 hours per day to meet FAA and TSA stand-by

requirements spending approximately $220000 annually to provide ARFF coverage and training

bull There are four different alert levels Alert 1 is a ldquostandbyrdquo only alert - majority of alerts Alert 2 involves small aircraft Alert 3 involves large aircraft Alert 4 miscellaneous category

bull The Airport averaged two alerts per month over the last six years (with one alert 3 over this period)

bull Two informal estimates were obtained for contracted ARFF services for $600000 and $12 million per year

bull A Request for Information will be released in early 2016 and information brought to the Board for direction during preparation of the FY 17-18 budget

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

ARFF Services at Comparable Airports Airport staff researched comparable California airports on ARFF coverage

bull Determined each airport handled and covered costs for ARFF in a manner most fitting for their circumstances

bull Most airports similar to or larger than STS have contracted ARFF services

bull Contract ARFF services can be provided by private contractors local governments local fire district or Cal-Fire

Airport Operations Budget 2014

Enplanement 2014

Airport Staff

Contract Fire Fire Contract Cost

Monterey $7700000 205000 380 Contracted $1200000 Bakersfield $9000000 143200 210 Contracted Equip cost only San Luis Obispo $4055000 140000 140 Contracted $600000 Sonoma County $4471144 120000 140 In-house $0 Stockton $3497000 71800 120 Contracted $170000 Arcata $5500000 56700 120 In-house $0 Santa Maria $4183000 51400 120 Contracted $634000 Redding $2861000 24900 90 Contracted Equip cost only

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Request for Feedback bull Long-term Parking

bull Airport Terminal Improvement Conceptual Plan

bull FundingFinancing Options

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Future Board Items bull February 9 2016

bull Fee Hearing and Airline Rates and Charges adoption bull Engineering Services Master Agreement

bull Spring 2016 bull Parking Lot Design Services Agreement bull Task Order for Terminal Design Services bull Interim Funding Agreements (Short-term funding options for terminal

design services long-term parking lot design services and long-term parking lot construction)

bull Master Agreement for Construction Management Services bull Contract Amendment with Electronic Innovations for design assistance and

integration for security systems in the proposed terminal space bull Alaska Airlines new Airline Operating Agreement

bull Fall 2016 bull Long-term Debt Solution bull Terminal Construction Contract

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter

Charles M Schulz - Sonoma County Airport

2290 Airport Boulevard

Santa Rosa CA 95403

(707) 565-7243

wwwsono macou ntya irportorg

Follow STS on (j Facebook

Im Linkedln

~ Twitter