I. RECOMMENDATION:
City Manager and Senior Administrative Analyst recommend City Council adopt Resolution No. 3920 Establishing Fair Market Rate for Hanger Lease at the New Coalinga Municipal Airport.
II. BACKGROUND:
This is a future agenda item request by Councilman Adkisson to review the lease rate of the airport hangars. The last hangar lease rate for the City was conducted many years ago. Lease rates increased over that time and updates are necessary to remain at current market rate.
III. DISCUSSION:
Hangar lease rates for city-owned hangars were established many years ago. During the fee study of 2017 the rates were not changed. Based on hangar lease rates not being changed the current lease rate is far below airports in the surrounding area. Updating the lease rate based on fair market value of surrounding area airports with similar size hangar types is suggested.
The primary purpose of contacting similar airports was to identify the current market rate for their hangars. The goal is to ensure the hangars at the New Coalinga Municipal Airport are leased at market value in the area. Staff reached out to the airports listed below in the surrounding area with similar hangar type.The lease rates vary widely as shown in the table below from $178 to $263. Increasing the monthly rate to the average cost of $215 per month is recommended. The new lease rate would be effective January 1, 2020.
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AIRPORT
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HANGAR LEASE RATE
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Hanford
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$178
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Reedley
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$205
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Visalia
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$263
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Monthly Average Cost New Proposed Lease Rate
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$215
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IV. ALTERNATIVES:
Do not approve the resolution.
V. FISCAL IMPACT:
Revenues generated from the proposed lease rates are unable to be determined at this time due to the unknown variable of the continued lease of hangars. |