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DATE: May 2, 2012 CONSENT AGENDA
SUBJECT: APPROVE ADDING TO THE COMPREHENSIVE FEE SCHEDULE
A COMMERCIAL SERVICES FEE FOR AIRPORT BASED AIRLINE
SUPPORT BUSINESSES
FROM: David H. Ready, City Manager
BY: DEPARTMENT OF AVIATION
SUMMARY
This action will provide for the implementation of an Airport Commercial Services Fee to
capture revenues from firms conducting aviation services business on Palms Springs
International Airport.
RECOMMENDATION:
Adopt Resolution No. , "A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF PALM SPRINGS, CALIFORNIA, ESTABLISHING FEES FOR COMMERCIAL
SERVICES AT PALM SPRINGS INTERNATIONAL AIRPORT AND MODIFYING THE
COMPREHENSIVE FEE SCHEDULE ADOPTED BE RESOLUTION NO. 21578 AS
AMENDED."
STAFF ANALYSIS
The Palm Springs International Airport is a financially self-sustaining enterprise fund
within the City of Palm Springs government. The City of Palm Springs goal for the
airport department as stated in Ordinance 1693 is to; "Ensure the Airport's Long Term
Financial Health". This Commercial Services Fee has been developed specifically to
bring the airport's fee schedule into equitable alignment and generate the revenues
necessary for the airport to meet its short and long term financial operating and capital
obligations.
The airport already has in place a compendium of different rates and charges which are
applied to the businesses that operate commercially within its property. The fee that
produces the majority of the airport's operating revenue is generated from a percentage
ITEM NO. ate_
City Council Staff Report
May 2, 2012 — Page 2
Airport-Commercial Service Fee
of gross revenues from tenant business concessions, a common practice within the
airport industry. The current concession fee structure is applied to the food, gift,
beverage, advertising and car rental businesses and the percentage varies from a
minimum of 7% to a maximum of 12.5% depending on several different variables.
These percentages are also consistent with what is being implemented throughout the
airport industry.
There are a few types of aviation specialty firms that have migrated onto PSP Airport
over the years and developed businesses that specialize in providing commercial
services to the airport's airlines. The airport's current fee schedule, which is
promulgated through the City's Comprehensive fee schedule, must be updated in order
to include a fee that will capture the revenue from these types of businesses and bring
them into parity with the rest of the airport tenant community which already contributes
its fair share to the airport's operating and capital obligations.
The fee being recommended for implementation has the title "Commercial Services
Fee" and will be applied to only those firms that have an established presence on the
airport's property generating business income from its commercial airline services.
These firms will be required to obtain an airport operating permit and pay the airport
fund a fee of 7% of its gross revenues generated from this airport business operation.
The definition for this Commercial Services Fee will read as follows:
Commercial firms that operate an airline support business based at Palm Springs
International Airport shall pay a commercial services fee equal to 7% of the gross
revenues derived from these business operations. This fee is not applicable to
commercial airlines providing services to other airlines.
FISCAL IMPACT
It is estimated that the application of this fee will generate approximately $300,000 in
additional revenue to the airport fund annually depending on the number of firm's that
are eligible, the magnitude of their business, and level of airline activity at the airport.
Thomas Nolan,
Executive Director, Airport
David H. Ready, City er
Attachment: Proposed Resolution
002
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM
SPRINGS, CALIFORNIA, ESTABLISHING FEES FOR COMMERCIAL
SERVICES AT PALM SPRINGS INTERNATIONAL AIRPORT, AND
MODIFYING THE COMPREHENSIVE FEE SCHEDULE ADOPTED BE
RESOLUTION NO. 21578 AS AMENDED.
WHEREAS, the City, under various statutory provisions under California Government Code,
may set and collect fees for the costs of providing various public services to the community; and
WHEREAS, the City currently charges commercial operators at the Palm Springs International
Airport a Commercial Service Fee as part of their contractual obligation with the City for the
privilege of generating business income at the Palm Springs International Airport; and
WHEREAS, staff is recommending and the City Council desires to establish a 7% of gross
revenues Commercial Services Fee be applied to those airport based businesses specializing in
airlines services and presently not paying any business privilege fees to the Palm
Springs I nternationalAirport operating and capital fund.
SECTION 1. FEES IMPOSED.
The City adopts the Commercial Services Fee as proposed on Schedule 1 of this
Resolution and incorporated by reference.
SECTION 2. SEVERABILITY.
Each component of the fees and all portions of this Resolution are severable. Should
any individual component of the fee or other provision of this Resolution be adjudged to
invalid, the remaining provisions shall be fully effective, and the fee shall be fully
effective except as to that portion that has been judged to be invalid.
SECTION 3. EFFECTIVE DATE.
The fees imposed by Section 1 of this Resolution shall be effective July 1, 2012.
SECTION 4. COMPREHENSIVE FEE SCHEDULE.
The City Clerk is hereby authorized and directed to incorporate said fees, charges and
modifications into the Comprehensive Fees Schedule, adopted Resolution No. , as amended.
ADOPTED THIS 2nd DAY OF MAY, 2012.
David H. Ready, City Manager
ATTEST:
James Thompson, City Clerk
003
SCHEDULE1
CITY OF PALM SPRINGS
SUMMARY OF PROPOSED FEE
Service Proposed Fees
Airport based Commercial Services Seven percent(7%) of
Businesses providing contracted support gross revenues.
Services to the airlines. Does not include
airlines servicing other airlines.
004