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DATE: November 16, 2011 CONSENT AGENDA
SUBJECT: AIR SERVICE INCENTIVE PROGRAM FUNDING IN THE AMOUNT OF
UP TO $100,000 TO ALASKA AIRLINES FOR SAN JOSE NONSTOP
SERVICE
FROM: David H. Ready, City Manager
BY: Department of Aviation
SUMMARY
This action would allocate Air Service Incentive funding to Alaska Airlines for new
service between Palm Springs and San Jose.
RECOMMENDATION:
1. Approve Air Service Incentive Agreement for nonstop flights provided by Alaska
Airlines from Mineta San Jose International Airport to Palm Springs International
(PSP) in an amount of a Not-To-Exceed $100,000.
2. Adopt Resolution No. , a resolution of the City Council of The City of Palm
Springs, California, amending the budget for Fiscal Year 2011-12.
3. Authorize City Manager to execute all the necessary documents.
STAFF ANALYSIS
To promote the growth of commercial airline service at Palm Springs International
Airport, an Air Service Incentive Program was developed to provide marketing funding
to new air carriers and current airlines that elect to operate new or expanded air service.
The City Council has approved to date over $500,000 of an original $1,000,000 for now
eight (8) expanded or new flights into PSP by five different airlines.
The route being addressed in this action is San Jose-Palm Springs and was last flown
by Alaska/Horizon in May 2009. The Airport Commission voted in support of the return
of this service and recommends the appropriation of the marketing funds. Service
to/from San Jose will be daily from February 17 through June 2, 2012 and this
combination of frequency and duration determined the qualified level of support from the
ITEM N0. —
City Council Staff Report
November 16, 2011 -- Page 2
Air Service Incentive Program
City's program. Funds allocated from this award will go directly into marketing by the
airline and ensure that Alaska's re-entry into this market will have advertising support.
The San Francisco Bay region is consistently a top market for air travel to/from Palm
Springs.
FISCAL:
The expenditure for this promotional support is a maximum, not to exceed, $100,000.
Funding for this expenditure requires a Budget Resolution from the Airport Fund Balance
Account 415-29301 and transferring into the Airline Incentive Program Account 415-6002-
45521.
Marketing and promotional funds offered through an air service incentive program are an
investment in the future growth of air service to PSP and any increased passenger traffic
will generate a direct and indirect economic benefit. The added passenger traffic from
this new service will create additional revenues through the Passenger Facility Charges
(PFC's), food and gift concessions, car rental concessions, vehicle parking fees, aircraft
landing fees, fuel flowage fees and other sources.
w
Thomas Nolan,
Executive Director, Airport
David H. Ready, WManager
Attachment: Budget Resolution
02
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET
FOR THE 2011-12 FISCAL YEAR.
WHEREAS, Resolution No. approving the budget for the Fiscal Year
2011-12 was adopted on June 1, 2011; and
WHEREAS, the City Manager has recommended, and the City Council desires to
approve, certain amendments to said budget.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM SPRINGS
DOES HEREBY RESOLVE, that the Director of Finance is authorized to record inter-
fund cash transfers as required in accordance with this Resolution, and that Resolution
No. adopting the Fiscal Year 2011-12 budget is hereby amended as follows:
SECTION 1. ADDITIONS
Fund Activity Account Amount
415 Airline Incentive Program 415-6002-45521 $100,000
Purpose: Establish funding for Airline Incentive Program
SECTION 2. SOURCE
Fund Activity Account Amount
415 Fund Balance 415-29301 $100,000
ADOPTED THIS DAY OF 2011.
David H. Ready, City Manager
ATTEST:
James Thompson, City Clerk
03
Resolution No.
Page 2
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that
Resolution No. is a full, true and correct copy, and was duly adopted at a
regular meeting of the City Council of the City of Palm Springs on
by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
James Thompson, City Clerk
City of Palm Springs, California
04