HomeMy WebLinkAbout4/7/2004 - STAFF REPORTS (25) DATE: April 7, 2004
TO: City Council
FROM: Director of Aviation
NEW TEN YEAR AIRLINE AGREEMENTS
RECOMMENDATION:
It is recommended that the City Council approve a new ten(10)year standard form
Airport Use and Lease Agreement for use with the airlines.
SUMMARY:
This proposed action would result in the establishment of a new standard form
agreement for the airport to utilize with all airlines desiring signatory status with the
airport. Previously in December 2003 City Council directed staff to hold community
meetings educating the public on the new agreement. These meetings were held
in February and March and we now seek council approval.
BACKGROUND:
The airport and its signatory airlines are currently working under a ten year standard
form Airport Use and Lease Agreement which expires on .tune 30, 2004. Airport
staff and the Airport Commission set a goal of completing a new agreement ahead
of the expiration date of the current agreement to ensure time for the airlines to
execute the new agreement.
Attached for City Council consideration is a new Airport Use and Lease Agreement
which has been negotiated with the airports incumbent signatory airlines. This new
agreement utilizes the current agreement as its baseline and was modified from this
to reflect current day changes in the industry.
The airport must operate under restrictions set by the Federal Government. These
restrictions, when it comes to dealing with airlines, state that all airlines must be
treated equally. Most airports in the country operate with some type of a use
agreement coupled with a permitting process to allow those airlines not willing to
sign an agreement to operate at the airport. Palm Springs international Airport
follows that model. The Airport Use and Lease Agreement grants rights to operate
at the airport, sets rates and charges, provides for some approval by the airlines of
what the airport does and requires the airlines to guarantee certain revenue levels.
Airlines that agree to sign such an agreement are known as `signatory airlines" in
the industry. Airlines that choose not to sign the airport's agreement are known as
.non-signatory airlines"; they must still provide all the necessary insurance and
indemnification under our permit process and they pay higher rates and charges as
they are not required to guarantee airport revenues.
The guiding financial principal behind the agreement is that after all non-airline
revenues are accounted for, any operating deficit (including reserve funding
requirements) must be made up by the signatory airlines. Whatever the rates and
charges are that result from the above deficit calculation,the non-signatory airlines 19R
pay at rates 125%of the signatory airlines.
December 17, 2003
Page 2
Another key issue that has long been tied to the operating agreements (over 20
years) is that of the airport's operating hours restrictions. The airlines have agreed
in the past to a limitation on hours of operation for commercial jets. That restriction
is no departures or scheduled arrivals after 10:00 p.m. or before 7:00 a.m. It should
be noted that this restriction does not apply to non jet commercial aircraft or any
type of private aircraft. All airlines currently operating at the airport are operating
Stage 3 noise compliant aircraft as mandated by the Federal Government. There
have been no new noise restrictions at airports approved in the last several years
and there has been Federal intervention via the courts stopping airports that tried
to restrict operating hours. The only way to establish a Federally approved noise
restriction is by following the Federal Aviation Regulation Part 161; that regulation
has been on the books for over 12 years and no airport has received approval,
though many tried.
Our airport completed a Part 150 study to establish a noise abatement program
which was approved by the Federal Government. The approval established the
current noise insulation program that the airport is completing with the final phase
on homes north of the airport.
As part of the airport's negotiations with the airlines we sought a voluntary extension
of our operating hours restriction. Not one of the airlines will agree, due to the
precedent it would set at other airports.
On June 30, 2004,with or without this new agreement,the airports operating hours
restrictions will go away. We could choose to not go forward with this agreement
and set our rules, rates and charges via ordinance; however, we would lose the
revenue guarantees from the airlines and we still would not have the operating
hours restrictions.
The specific terns of the agreement are summarized as follows:
Term:
10 years beginning July 1, 2004;
— Rights:
Provides the airlines all rights necessary to operate a full
service airline;
— Space Leased:
Exclusive Use Space: ticket counter/back office
Preferential Use Space: gates and holdrooms
Joint Use/Common Area Space: baggage claim
December 17, 2003
Page 3
- Rates&Charges-
-Exclusive Use Space: $20.63/sq.ft./annum(Conditioned Space)
$10.321sq.ft./annum(Non-Conditioned Space)
- Passenger Loading Bridge Fee: $40 per operation
- Landing Fees: $1.2511,000 lbs. gross landed weight
- Joint Use/Common Area Space Fee: Formula(varies annually)
- 10%apportioned equally among signatory
airlines
-90%apportioned based on enplaned passengers
-The amount to be apportioned is referred to as the
.net requirement"
(Note: The airport's revenues are all placed into what the industry refers to as a "single
cash box" The revenue is then balanced against all operating costs, debt service
requirements and reserve requirements-any deficit is the net requirement.)
- Special Capital Projects Fund Fee:A per passenger charge based
upon annual funding required divided by the previous year's
enplaned passengers.
-Funding Requirements:
-Year 1: $310,000
-Year 2: $320,000
-Year 3:$330,000
-Year 4:$340,000
-Year 5 through 10:$350,000
-Non Signatory Airline Fees: 125°%of all of the above.
(Note: The airport also receives a passenger facility charge (PFC) which is based on
$4.50/enplaned passenger. This fee is set under a separate Federal approval process and
all the dollars collected go towards paying the debt on the airport's bonds.)
-Reserve Requirements:
-Operation and Maintenance Reserve: 15%of annual O&M budget
-Landside Reserve: $250,000 annually
-Airline Approvals:
-The agreement provides a majority-in-interest clause which only allows
certain capital projects to proceed unless airlines representing 50% of the
passengers approve. These are primarily projects which are not grant
funded and require the airlines to pay for them. I&K3
December 17, 2003
Page 4
- Bond Indebtedness:
-The agreement that the airport will issue no new indebtedness during the first
two years without receiving airline approval. For the remainder of the
agreement any additional indebtedness which effects the"net request' by
more than$400,000 annually requires airline approval.
-Operating Hours Restriction is not included.
- Insurance/Indemnification:
Per Risk Management
-Gates:
-Are non-exclusive but preferential. Exhibit"IT'defines the allocation formula
with the airport in the position of making necessary adjustments to ensure
New carriers will be accommodated_
This agreement has been reviewed and approved by the Finance Subcommittee of the
Airport Commission, by the Airport Commission and by the City Attorney's office.
The attached resolution would approve this agreement as the standard form agreement for
all airlines to utilize over the next ten years and would authorize the city Manager to approve
all such agreements submitted by airlines during the ten year term.
Richard S. Walsh A.A.E.
Director of Aviation
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APPROVE � c'r!fCp'✓
City Manager
Attachments:
1. Resolution
2. Standard Form Agreement
STANDARD FORM 04-001A
AIRPORT USE AND LEASE AGREEMENT
PALM SPRINGS INTERNATIONAL AIRPORT
Dated July 1, 2004
Between
CITY OF PALM SPRINGS
PALM SPRINGS, CALIFORNIA
and
[Airline]
I
Palm Springs
International Airport
AMERICA'S RESORTPORT
11105"o
TABLE OF CONTENTS
PREAMBLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01 Aircraft Operator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02 Aircraft Parking Position(s) or AC Parking Position(s) . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section1.03 Airline Funded Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.04 Airline Rates and Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.05 Airport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.06 Airport Improvement Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.07 Airport Layout Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.08 Airport Terminal Development Program or Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.09 Airside Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.10 Capital Expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.11 Capital Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.12 Certificated Maximum Landing Weight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.13 Concession Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section1.14 Concourses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.15 Concourse Gate Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section1.16 Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.17 Director of Aviation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section1.18 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.19 Enplaned or Enplaning Passengers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section1.20 Exclusive Use Space . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.21 Exclusive Use Space Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.22 Expiration Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.23 FAA or Federal Aviation Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section1.24 Fee Landing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section1.25 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.26 Independent Accountant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.27 Joint Use/Common Area Space . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.28 Joint Use/Common Area Space Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.29 Joint Use Formula . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section1.30 Landing Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section1.31 Landing Fee Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section1.32 Landside Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section1.33 Landside Reserve Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.34 Main Terminal Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.35 Maintenance and Operations Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.36 Maintenance and Operations Reserve Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.37 Net Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.38 Passenger Departure Lounge(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.39 Passenger Loading Bridge Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.40 Preferential Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.41 Preferential Use Space . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section1.42 Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section1.43 Reserve Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section1.44 Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.45 Signatory Airline(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.46 Single Cash Box . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.47 Special Capital Projects Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.48 Special Capital Projects Fund Surcharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.49 Terminal Area or Terminal Building Complex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.50 Transportation Security Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE II - TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Airport Use and Lease Agreement i ated July 1, 2004
Section 2.01 Term of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III - GRANT OF RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.01 Rights of Airline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLEIV-AIRLINE PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.01 Period From Effective Date to Expiration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE V-CALCULATION OF AIRLINE RATES AND CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.01 General Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.02 Preliminary Projection of Airline Joint Use/Common Area Space Fee . . . . . . . . . . . . 13
Section 5.03 Period From Effective Date to Expiration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.04 Landing Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.05 Supplemental Space . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.06 Special Capital Projects Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.07 Employee Ground Vehicle Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.08 Insufficiency of Airport Revenues, Adjustment of Airline Rates and Charges . . . . . . . . 16
Section 5.09 Annual Adjustment to Actual Airline Rates and Charges . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.10 Costs Excluded . . . . . . . . . . . . . . :. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.11 Other Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.12 Non-Signatory Airlines Rates and Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VI - IDENTIFICATION AND ALLOCATION OF REVENUES AND EXPENSES . . . . . . . . . . . . . 19
Section 6.01 Maintenance and Operations Expenses, Reserve Fund Deposit Requirements and
Non-Use Agreement Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.02 Disposition of Airport Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.03 Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.04 Maintenance and Operations Reserve Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.05 Landside Development Reserve Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VII - PAYMENT OF AIRLINE FEES AND CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 7.01 Preliminary Projection of Joint Use/Common Area Charges . . . . . . . . . . . : . . . . . . . 20
Section 7.02 Payment of Airline Rates and Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 7.03 Late Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE VIII - PRINCIPLES RELATING TO RATE AND CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.01 General Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.02 Accounting Principals &Audit Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Section 8.03 Cost or Expense Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 8.04 City to Exercise Prudence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 8.05 Additional Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 8.06 Airline Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.07 Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.08 Bonded Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.09 Outside Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE IX- NOT UTILIZED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE X- MAINTENANCE, OPERATION, USE AND CONDITION OF PREMISES . . . . . . . . . . . . . . 24
Section 10.01 Maintenance and Operation of the Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 10.02 Maintenance and Operation of Airport by City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 10.03 Accommodations of Other Incoming Aircraft Operators . . . . . . . . . . . . . . . . . . . . . . . 25
Section 10.04 Gate Positions and Loading Ramps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 10.05 Aircraft Parking Position(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section10.06 Public Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section10.07 Signs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 10.08 Alteration, Repair, Maintenance, Remodeling, Expansion, Removal and/or
Improvement of the Facilities of Terminal Building Complex or Its Appurtenances . . . . . 27
Section 10.09 Airport Security- Federal Aviation Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 10.10 Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Airport Use and Lease Agreement ii ated July 1, 2004
Section 10.11 Trash, Garbage, Aircraft Sewage and Other Refuse . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 10.12 Vehicles and Automotive Equipment on Airside Area and Aircraft Parking Positions . 28
Section 10.13 Security Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE XI - NO OTHER CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section11.01 No Other Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE XII - INDEMNITY AND INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 12.01 Indemnification of Airport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 12.02 Airline Public Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 12.03 Workers Compensation Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 12.04 City Public Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 12.05 Fire and Extended Coverage Insurance- Terminal Building Complex . . . . . . . . . . . . 32
Section 12.06 Airline Insurance on Automobiles and Other Ground Vehicles . . . . . . . . . . . . . . . . . . 32
Section 12.07 Commercial General Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 12.08 General Provision Applicable to Airline's Insurance . . . . . .I. . . . . . . . . . . . . . . . . . . . 33
ARTICLE XIII - QUIET ENJOYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 13.01 Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE XIV- INSPECTION BY CITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 14.01 Inspection by City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE XV- RULES AND REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 15.01 Rules and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE XVI -ASSIGNMENT AND SUBLEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 16.01 Assignment and Sublease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE XVII - SURRENDER OF POSSESSION - HOLDING OVER . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 17.01 Surrender of Possession - Holding Over . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE XVIII -TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section18.01 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE XIX- DEFAULT AND CANCELLATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 19.01 Default by Airline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 19.02 Remedies Upon Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 19.03 Cancellation by City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 19.04 Cancellation by Airline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE XX- DAMAGE AND DESTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 20.01 Damage or Destruction of Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE XXI - PROHIBITED USES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 21.01 Prohibited Uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 21.02 Oil, Fuel and Other Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 21.03 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE XXII - IMPROVEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 22.01 Improvements by Airline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 22.02 Conditions Covering Improvements and Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 22.03 Ownership of Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE XXIII - FEDERAL GRANTS AND NON-DISCRIMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 23.01 Non-Discrimination and FAA Required Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 23.02 Federal Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE XXIV- CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 24.01 Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Airport Use and Lease Agreement iii Dated July 1, 2004
ARTICLE XXV- MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 25.01 Non-Waiver of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 25.02 Invalidity of Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 25.03 Approval by the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 25.04 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 25.05 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 25.06 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 25.07 Non-Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 25.08 Attorneys' Fees and Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 25.09 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 25.10 Termination of Prior Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 25.11 Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 25.12 Agreement Not to Grant More Favorable Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 25.13 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 25.14 Invalidity of Covenants, Conditions or Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 25.15 Jurisdiction and Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
� //T
Airport Use and Lease Agreement iv Dated July 1, 2004
EXHIBITS
EXHIBIT A Airside, Terminal and Landside Areas
EXHIBIT B Existing Joint Use Baggage Claim/Common Area and Terminal Building Complex
EXHIBIT C Exclusive Use Space
EXHIBIT D Preferential Use Space
EXHIBIT E Maintenance, Services and Utilities Responsibilities
EXHIBIT F Supplemental Space
EXHIBIT G Gate Allocation Formulas
/ 9 1)
Airport Use and Lease Agreement v_ Dated July 1, 2004
AIRPORT USE AND LEASE AGREEMENT
THIS AIRPORT USE AND LEASE AGREEMENT("Agreement") made and entered into as of the_day of
2004, by and between the CITY OF PALM SPRINGS, a municipal corporation organized and
existing under the laws of the State of California ("City"), and a corporation
organized and existing under the laws of the State of ("Airline").
WITNESSETH:
WHEREAS, the City owns and operates the Palm Springs International Airport ("Airport"), located in
the City of Palm Springs, County of Riverside, State of California; and
WHEREAS, City operates the Airport as a governmental function for the primary purpose of providing
to the public the service of air transportation; and
WHEREAS, Airline is engaged in the business of commercial air transportation of persons, property,
cargo and mail ("Air Transportation") and desires to enter into a use and lease agreement covering certain
premises, facilities, rights, licenses, services and privileges at the Airport; and
WHEREAS, City and Airline mutually desire to enter into an Agreement, in order to provide Air
Transportation services for the community and its visitors, and
WHEREAS, City has the right to permit the use of its property at the Airport and to grant the use of the
Airport to Airline for the operation of Airline's Air Transportation service.
NOW, THEREFORE, for and in consideration of the Premises and the mutual covenants hereinafter
contained to be observed and performed,the parties hereto covenant, agree and bind themselves as follows:
ARTICLE I
DEFINITIONS
The following words, terms and phrases, whenever used in this Agreement, shall have the meanings
respectively ascribed to them in this Article.
Section 1.01 Aircraft Operator shall mean the operator of an aircraft, whether the aircraft is owned, leased or
chartered, that is used for private, military, pleasure or governmental operations, or for airline or non-airline
operations, or for scheduled or non-scheduled operations. "Aircraft Operator" does not mean the pilot of an
aircraft unless such pilot is also the owner or lessee thereof or a person to whom such aircraft is chartered.
Airport Use and Lease Agreement 1 Dated July 1, 2004
Section 1.02 Aircraft Parking Position(s) or AC Parking Position(s) shall mean the positions on the
Airport's Terminal apron area where aircraft are required to park in order to enplane and deplane passengers.
Section 1.03 Airline Funded Cost shall mean for each Capital Project described in the Airport
Development Program,the estimated amount set forth opposite such Capital Project in the Airport Development
Program.
Section 1.04 Airline Rates and Charges shall mean for any Fiscal Year, all rates, fees and charges
payable to City by all Signatory Airlines for such Fiscal Year as specified herein.
Section 1.05 Airport shall mean the Palm Springs International Airport owned and operated by the City
of Palm Springs,the location of which is 3400 East Tahquitz Canyon Way,Suite OFC, Palm Springs, California,
Riverside County.
Section 1.06 Airport Improvement Program shall mean the Federal Grant in Aid program for airports,
as it now exists or as it may be modified in the future.
Section 1.07 Airport Layout Plan shall mean the Airport Layout Plan approved and in place as of July
1, 2004, as it may be amended from time to time, required by the Federal Aviation Administration to be
submitted by the City for review and approval showing the layout of the Airport and the current and projected
uses of the facilities located at the Airport.
Section 1.08 Airport Development Program shall mean the expansion and improvement of the Airport
as more specifically described in the current Airport Master Plan and Airport Capital Improvement Program ,
and as it may be modified from time to time.
Section 1.09 Airside Area shall mean the land identified as Airside Area on Exhibit A attached hereto,
and except as otherwise provided herein, all facilities, equipment and improvements now or hereafter located
thereon, including but not limited to the following:
(a) Airside Area
(1) Runways- runways at the Airport for the landing and taking-off of aircraft;
(2) Taxiways-taxiways and taxilanes at the Airport for the ground movement of aircraft to,
from and between the runways,Aircraft Parking Areas,and other portions of the Airport;
(3) Aircraft Parking Positions;
(4) Facilities Incidental to the Runways and Taxiways - facilities for the purpose of
controlling and assisting arrivals, departures and operations, of aircraft using the
Airport, such as airfield security roads, control towers, navigational aids, and support
Airport Use and Lease Agreement 2 t July 1, 2004
facilities operated and maintained by the FAA, signals, beacons, wind indicators,flood
lights, landing lights,boundary lights,construction lights,fencing,open or undeveloped
spaces or areas inside Airport fence not in Terminal or Landside Areas, radio and
electronic aids or other aids to operations, navigation or ground control of aircraft
whether or not of a type herein mentioned and even though located away from the rest
of the Airside Area;
(b) Air Freight Buildings, Maintenance and Hangar Facilities, and Fixed Base Operations(FBOs);
and
(c) Aircraft Rescue and Firefighting (ARFF) Services, facilities and equipment .
Section 1.10 Capital Expenditure shall mean an expenditure for the acquisition, construction or
equipping of Capital Project,togetherwith related design,architectural and engineering fees,consulting fees,
laboratory and testing fees, financing costs, and other associated costs.
Section 1.11 Capital Project shall mean a capital improvement at the Airport in excess of$50,000, or
the acquisition of land beyond the then current boundaries of the Airport for use as a part of the Airport.
Section 1.12 Certificated Maximum Landing Weight shall mean the current maximum allowable gross
landing weight, expressed in 1,000 pound units, of aircraft operated by Airline and certificated by the Federal
Aviation Administration for operation at the Airport.
Section 1.13 Concession Revenues shall mean for any Fiscal Year, rentals, charges and fees of any
kind or nature payable to City during such Fiscal Year from tenants, licensees, permittees, or other operators
at the Airport, for the right to use premises at the Airport to sell or lease merchandise, services (other than Air
Transportation) or other intangibles, including, but not limited to, restaurants, cocktail lounges, car rental
agencies, news stands, gift shops, specialty shops, advertising displays, insurance sales facilities, public
telephones, facilities for the furnishing of ground transportation services, and parking areas.
Section 1.14 Concourses shall mean the areas serving the Signatory Airlines and other Aircraft
Operators for the loading and unloading of passengers, including Passenger Departure Lounges; Passenger
Loading Bridges, where applicable; concession areas; public areas, including security screening; and other
tenant and City space thereon.
Section 1.15 Concourse Gate Position shall mean an aircraft loading facility unit in the Concourses,
which may include a Passenger Departure Lounge, and where applicable, an Passenger Loading Bridge and
the Aircraft Parking Position. Eight Passenger Loading Bridges are currently provided. A41
Airport Use and Lease Agreement 3 Dated July 1, 2004
Section 1.16 Debt Service shall mean for any Fiscal Year, principal payments, interest payments,fund
deposit requirements and amounts payable as a result of debt service coverage requirements on obligations
of the Airport payable for such Fiscal Year, including but not limited to bonds, notes and certificates of
participation.
Section 1,17 Director of Aviation shall mean the person designated by City to exercise functions with
respect to the rights and obligations of City under this Agreement. The term also includes any person expressly
designated to exercise functions with respect to the rights and obligations of the Director of Aviation under this
Agreement, or such other person, division, department, bureau, or agency as may from time to time exercise
functions equivalent or similar to those exercised by the Director of Aviation, as appointed by the City.
Section 1.18 Effective Date shall mean July 1, 2004.
Section 1.19 Enplaned or Enplaning Passengers shall mean the revenue, originating,and connecting
passengers actually boarding the aircraft operated by the Airline or user of the facility in question at the Airport
during the period of the cost apportionment.
Section 1.20 Exclusive Use Space shall mean the areas of the Terminal Building Complex consisting
of ticket counter space, office and operations space, outbound baggage space and baggage service desks
which City has granted Airline the right to use on an exclusive use basis from the Effective Date of this
Agreement. Airline's Exclusive Use Space is shown on Exhibit"C".
Section 1.21 Exclusive Use Space Rate shall have the meaning assigned in Section 5.02(A).
Section 1.22 Expiration Date shall mean June 30, 2014,
Section 1.23 FAA or Federal Aviation Administration shall mean the Federal Aviation Administration
created underthe Federal Aviation Act of 1958 or such successor agency as may from time to time have similar
jurisdiction over Airline or its business, and Airport.
Section 1.24 Fee Landing shall mean any landing at the Airport of an aircraft, except general aviation;
military;an aircraft engaged in flight training and testing,subject to Section 3.01(D); and an aircraftwhich takes
off from the Airport and, without making a stop at any other airport, returns to and lands at the Airport because
of meteorological conditions, mechanical or operating causes, or any similar emergency or precautionary
reason.
Section 1.25 Fiscal Year shall mean the 12-month period beginning on the 1 st day of July of any year
or any 12-month period the City may designate.
Airport Use and Lease Agreement 4 Dated July 1, 2004
Section 1.26 Independent Accountant shall mean a certified public accountant selected by City,
licensed to practice in the State of California, and who (a) in the case of an individual, shall not be a director,
commissioner,officer or employee of either City or any Signatory Airline,(b)shall be satisfactory to the Trustee,
if any, and (c) may be the independent accountant that regularly audits the books of City or the Airport.
Section 1.27 Joint Use/Common Area Space shall mean the areas of the Terminal Building Complex
which City has granted Airline the right to use jointly with others for all lawful airport purposes. The Joint Use
/Common Space is shown on Exhibit"B".
Section 1.28 Joint Use/Common Area Space Fee shall have the meaning as assigned to such term
in Section 5.03(C) of this Agreement.
Section 1.29 Joint Use Formula shall mean the formula used to prorate the Joint Use/Common Area
Space Fee such that 10%of the fee shall be apportioned equally among the, Signatory Airlines and 90% of the
fee shall be apportioned on a prorata basis among the Signatory Airlines in the same proportion that the number
of each Signatory Airline's Enplaning Passengers at the Airport during the Fiscal Year under consideration bears
to the total number of Enplaning Passengers of all Signatory Airlines at the Airport during the same Fiscal Year.
Section 1.30 Landing Fee shall have the meaning assigned to such term in Section 5.04 of this
Agreement.
Section 1.31 Landing Fee Rate shall have the meaning assigned to such term in Section 5.04 of this
Agreement.
Section 1.32 Landside Area shall mean the area identified as Landside Area on Exhibit A, and except
as otherwise provided herein, all facilities, equipment and improvements now or hereafter located thereon.
Section 1.33 Landside Reserve Fund shall have the meaning assigned to such term in Section 6.05 of
this Agreement.
Section 1.34 Main Terminal Building shall mean that portion of the Terminal Building Complex serving
Aircraft Operators and others as shown on Exhibit B, including but not limited to airline ticket counters, airline
office and operations space,outbound baggage belts,baggage claim area,public space,airport operations and
administration space, law enforcement office, concession space, and other tenant and City space thereon.
Section 1.35 Maintenance and Operations Expenses shall mean the costs incurred by the City in
operating, maintaining, repairing, and administering the Airport during such Fiscal Year, either directly or
indirectly by allocation to the Airport by City, including, but not limited to:
19&r-
Airport Use and Lease Agreement 5 Dated July 1, 2004
(a) The following costs and expenses incurred by City for employees of City employed at the
Airport, or doing work involving the Airport:direct salaries and wages(including overtime pay),
together with payments or costs incurred for associated payroll expenses, cash payments to
pension funds, retirement funds or unemployment compensation funds, life, health, accident
and unemployment insurance premiums,deposits for self-insurance,vacations and holiday pay,
and other fringe benefits;
(b) Cost of repairs, materials, supplies, machinery and equipment and other similar expenses
which, under generally accepted accounting principles, are not capitalized;
(c) Costs of maintenance, landscaping, decorating, repairs, renewals, and alterations not
reimbursed by insurance, and which, under generally accepted accounting principles, are not
capitalized;
(d) Costs of water, electricity, natural gas, telephone service and all other utilities and services
whether furnished by City or purchased by City and furnished by independent contractors at or
for the Airport;
(e) Costs of rentals of equipment or other personal property;
(f) Costs of rentals of real property;
(g) Costs of premiums for insurance, including property damage, public liability, burglary, bonds
of employees,workers'compensation, disability, automobile, and all other insurance covering
the Airport or its operations;
(h) Terminal fees and charges, concession fees, Landing Fees, miscellaneous Airport fees and
indemnification payments unpaid by any Aircraft Operator or otherAirport tenant when due and
reasonably deemed by City to be uncollectible after collection efforts have been undertaken by
City;
(i) Costs incurred in collecting and attempting to collect any sums due City in connection with the
operation of the Airport;
Q) Costs of advertising at or for the Airport, including public relations brochures and events;
(k) Costs of Law Enforcement (less any reimbursement from TSA) and Aircraft Rescue and
Firefighting (ARFF) services;
(I) Except to the extent capitalized, compensation paid or credited to persons or firms appointed
or engaged, from time to time, by City to render advice and perform architectural, engineering,
Airport Use and Lease Agreement 6 a ed my 1, 2004
construction management,financial, legal,accounting,consulting,testing or other professional
services in connection with the operation, expansion, alteration, reconstruction, betterment or
other improvement of the Airport or any of its structure or facilities;
(m) Except to the extent capitalized, trustees' fees, paying agents' fees, and all other fees and
expenses incurred in order to comply with the provisions of any ordinance or resolution
authorizing indebtedness.
(n) The costs of maintaining and operating the public address system, flight information display
system, and the security access control system; and
(o) All other direct and indirect expenses which arise out of City's operation of the Airport, and
which, under generally accepted accounting principles, are properly chargeable as expenses
to the Airport, including any taxes payable by City which may be lawfully imposed upon the
Airport.
Section 1.36 Maintenance and Operations Reserve Fund shall mean the Maintenance and Operations
Reserve Fund created under Section 6.04.
Section 1.37 Net Requirement shall mean the amount due from the Signatory Airlines to recover any
deficit balance in the City's financial operating projection for the Airport for a Fiscal Year, after taking into
consideration all projected revenues,and subtracting therefrom all Maintenance and Operating Expenses, Debt
Service requirements, small capital expenditures, and Reserve Fund deposits or payments. The Net
Requirement shall be determined a result of the Airport's preliminary projection of Airline Rates and Charges,
and may be revised for any interim review of such charges, and shall be finalized as a result of the post-Fiscal
Year review of such charges. The Net Requirement shall be collected as the Joint Use/Common Area Space
Fee.
Section 1.35 Passenger Departure Lounge(s) shall mean the area assigned to Aircraft Operators on
a joint use basis for the assembly and processing of passengers.
Section 1.39 Passenger Loading Bridge shall mean the covered equipment affixed to the terminal to
permit passenger access to parked aircraft.
Section 1.40 Passenger Loading Bridge Fee shall have the meaning assigned to such term in Section
5.03(D) of this Agreement.
Section 1.41 Preferential Use shall mean a Signatory Airline's right to use space prior to use by others
on a nonexclusive basis.
Airport Use and Lease Agreement 7 Dated July 1, 2004
Section 1.42 Preferential Use Space shall mean the areas of the Terminal Building Complex consisting
of Aircraft Parking Positions, Passenger Departure Lounges and equipment,and Passenger Loading Bridges.
which City has granted to Airline a right to use on a nonexclusive but Preferential Use basis from the Effective
Date of this Agreement. Airline's Preferential Use Space is shown on Exhibit "C".
Section 1.43 Premises shall mean the Exclusive Use Space,the Preferential Use Space,and the Joint
Use Space leased or assigned to airline and shown on Exhibit"C".
Section 1.44 Reserve Funds shall mean the Maintenance and Operations Reserve Fund, Special
Capital Projects Fund and Landside Development Fund.
Section 1.45 Revenues shall mean for any Fiscal Year all monies collected by the Airport.
Section 1.46 SignatoryAirline(s)shall mean Airline and other Aircraft Operators serving the Airport that
have entered into agreements with the City that are substantially similar to this Agreement.
Section 1.47 Single Cash Box Cost Revenue Center for cost accounting purposes shall mean all of the
Airport's operational costs,debtservice,reserve requirements,small capital requirements and all of its revenue,
including Airline revenues, with the exception of the Joint Use/Common Area Fees.
Section 1.48 Special Capital Projects Fund shall mean the Special Capital Projects Fund created under
Section 5.05.
Section 1.49 Special Capital Projects Fund Surcharge shall have the meaning assigned to such term
in Section 5.06(C) of this Agreement.
Section 1.50 Terminal Area or Terminal Building Complex shall mean the Main Terminal Building and
concourses.
Section 1.51 Transportation Security Administration (TSA) shall mean the Federal Agency within
Homeland Security Department responsible for regulation of Airport Security.
ARTICLE II
TERM
Section 2.01 Term of Agreement
The term of this Agreement shall commence on the Effective Date, , 2004, and expire
on June 30, 2014, the Expiration Date. In accordance with Section 19.04, said Airline may cancel this
Agreement by providing three hundred sixty four(364) days written notice to City.
tw 6
Airport Use and Lease Agreement 8 Dated July 1, 2004
ARTICLE III
GRANT OF RIGHTS
Section 3.01 Rights of Airline
Airline shall have the following rights with respect to the Airport:
(A) Right to Use Airport. The City hereby grants to Airline, its employees, passengers, guests,
patrons, and invitees, the right to the use of (in common with other duly authorized users) the Terminal,
Landside and Airside Areas together with all facilities, improvements, equipment, and services that have been
or may be provided for common use of such facilities and areas.
(B) Right to Operate Aircraft. Airline shall have the right to land, take off, fly over, taxi, push and
tow, any aircraft of its choice, properly licensed by the FAA and all other governmental authorities with
jurisdiction, in appropriate areas of the Airport(subject to the design limitations of such areas)and to park, load
and unload such aircraft at the Aircraft Parking Position(s)assigned to Airline.Airline acknowledges that Palm
Springs and its neighboring cities are noise sensitive communities.
(C) Right to Provide Services. Within designated areas, Airline shall have the right to sell Air
Transportation tickets and services;to process passengers and their baggage for air travel;to sell, handle,and
provide mail, freight, express and cargo services; and to perform other similar activities reasonably related to
the operation of Airline's Air Transportation service.
Subject to the provisions of Section 3.01(0) hereof, Airline shall have the right to perform ground
handling services for itself or other airlines engaged in Air Transportation. Said ground handling services may
be provided via an independent vendor so long as said vendor is properly licensed to operate on the Airport.
Airline shall have, for itself or may designate a food service vendor on its behalf, the right to sell to its
passengers an in-flight meal in the Passenger Departure Lounge, provided that such food services vendorshall
be permitted to provide such service in the Terminal Area, and that the Airline and or vendor shall provide such
service in line with all rules and regulations of the Airport.
(D) Right to Provide Training. Airline shall have the right to provide training at the Airport of
personnel in the employ of or to be employed by Airline and the testing of aircraft and other equipment owned
and operated by Airline, provided that such training and testing shall be incidental to the use of the Airport in
the operation by Airline of its Air Transportation service. Such training and testing shall not unreasonably
hamper or interfere with the use of the Airport by other users entitled to the use thereof;and shall be conducted
in areas of the Airport which have been leased to Airline or authorized by the Director of Aviation.
Airport Use and Lease Agreement 9 to Ju 1, 2004
(E) Right to Sell Its Aircraft Equipment and Supplies. Airline shall have the right to sell, dispose
of or exchange Airline's aircraft, engines, accessories and other equipment or supplies bought for its own use
or as part of ground handling services provided to other airlines and not for resale. This right shall not imply
that Airline has the right to conduct a separate business related to such sales.
(F) Right to Purchase from Person or Company of its Choice. Airline shall have the right to
purchase atthe Airport or elsewhere from any person or company of its choice, its requirements of aviation fuel,
ground vehicle fuel, lubricating oil, greases, food, beverage, and other passenger supplies, and all other
materials and supplies and services,so long as that person or company is properly permitted to provide service
at the Airport.
(G) Right to Service Aircraft and Other Equipment. Airline shall have the right to have its aircraft
and other equipment serviced by suppliers of its choice. Such suppliers may provide materials and services,
including, but not limited to, aviation fuel, ground vehicle fuel, lubricating oil, greases, parts and all other
materials and supplies and services required by Airline in the conduct of its Air Transportation service. Such
right shall include, but not be limited to, the right to erect, install and maintain at designated locations at the
Airport(as authorized by the Director of Aviation for that purpose by separate agreement between Airline and
City) storage facilities for aviation fuel, lubricating oil, greases and other materials and supplies, together with
the necessary pipes, pumps, motors, filters and other appurtenances incidental to the use thereof, so long as
said supplier is properly permitted to provide service at the Airport.
(H) Right to Operate Shuttle / Delivery Service. Airline shall have the right to load and unload
persons, property and mail by such motor vehicles or other means of conveyance at areas designated by City
as Airline may reasonably require in the operation of its Air Transportation service so long as operator of the
service is properly permitted to operate at the Airport. Airline may designate the particular ground carrier, or
carriers,that may transport Airline's employees, property and mail to,from and on the Airport, provided that the
particular carrier or carriers so designated by Airline hereunder shall be required to comply with all applicable
and reasonable rules, regulations and laws. Contractual arrangements by Airline hereunder with any carrier
of passengers and their baggage for ground transport to and from the Airport shall subject to the payment to
City by said passenger carriers of a fee to be fixed and determined by City. Such fees shall not apply to
arrangements for late or other baggage delivery, crew hauls/shuttles, or surface transportation provided for a
diverted or canceled flight.
/W20
Airport Use and Lease Agreement 10 Dated July 1, 2004
(1) Right to Install Signs. Airline shall have the right to install signs identifying Airline's Exclusive
Use and Preferential Use Space and the function or operation conducted therein. The number, size, type,
design and location shall be harmonious and in keeping with the pattern and decor of the Terminal Area and
shall be subject to Section 10.07 and the prior written approval of the Director of Aviation.
(J) Right to Install and Operate Communications Equipment. Airline shall have the right to install,
maintain and operate on or about the Airport such telecommunications (including radio antennas),
meteorological and aerial navigation equipment and other facilities as may be reasonably necessary or
convenient for the proper performance and operation by Airline of its Air Transportation service; provided (i)
such equipment does not interfere with other existing equipment at the Airport or prevent the Airport or its
contractors from installing and using additional equipment for Airport purposes, and (ii) such equipment
installation and use is approved in writing by the Director of Aviation. Such equipment and facilities shall be
located in areas leased to Airline for its exclusive use, or on such other portions of the Airport as may be
authorized for that purpose by the City. Airline shall be provided with reasonably adequate rights of way for the
installation of communications controls, teletype, telephone, interphone, pneumatic tubes and power lines in
and between the Terminal Building Complex and other points at the Airport; provided, however,the manner of
such installations and the location of such rights of way shall be subject to approval by the Director of Aviation.
(K) Ingress and Egress. The City hereby grants to the Airline, its agents,employees, passengers,
guests, invitees, contractors and suppliers of material and service the right to reasonable access, ingress and
egress to the Premises and the public areas and facilities of the Airport. Such right shall be exercised in
accordance with Airport rules and regulations and shall at all times be exercisable without charge to the Airline,
its agents, employees, guests, passengers, invitee, contractors and suppliers of materials and services;
provided, however, that this provision shall not be construed to prevent the City from imposing the additional
rentals, fees, taxes, and charges referred to in Section 11.01 of this Agreement.
(L) Porter Services. Airline shall have the right to participate in nonexclusive porter services in
conjunction with all scheduled airlines serving the Airport to assist its passengers with their baggage. Should
Airline choose not to provide porter services to assist passengers with luggage, City may solicit for porter
services with said solicitation to require indemnification by vendor of Airline and Airport for lost luggage. Any
agreement resulting from said solicitation shall be cost neutral to the Airport and Airlines.
(M) Right to Provide Curbside Baggage Check-In Service. Airline shall have the right to provide
curbside baggage check-in service, the location and operation of which shall be subject to the prior written
Airport Use and Lease Agreement 11 Dated July 1, 2004
approval of Director of Aviation and the lawful rules and regulations of City and the Transportation Security
Administration.
(N) Right to Provide Services on Behalf of Other Aircraft Operators. The rights and privileges
granted Airline under this Article III, with respect to the performance of ground services and activities in
connection with its Air Transportation services at the Airport, may be exercised by Airline for and on behalf of
any other Aircraft Operators or companies authorized by City to use the Airport. This provision shall not be
construed by the parties hereto to impede, hinder or negate the legislative intent of the Airline Deregulation Act
of 1978.
(0) No Other Business Authorized. Nothing contained in this Section 3.01 shall be construed to
authorize Airline to conduct a business of any kind at the Airport except its Air Transportation service, and
nothing herein contained shall be construed as authorizing Airline in its conduct of its Air Transportation service
to interfere u n reasonably with other persons or tenants leasing or lawfully using Airport facilities. Nothing in this
Section shall be construed as in any way limiting the general powers of City to fully exercise its statutory
functions.
(P) Rules and Regulations. All activities of Airline pursuant to this section 3.01 shall be performed
in compliance with all applicable Federal, State and local laws, ordinances, and regulations.
ARTICLE IV
AIRLINE'S PREMISES
Section 4.01 Period From Effective Date to Expiration Date
Commencing on the Effective Date of this Agreement and continuing until the Expiration Date, City
grants Airline the rights of use, as set forth in Article I,to use certain premises located in the Terminal Building
Complex at the Airport, consisting of the following:
(A) Exclusive Use Space. A portion of the Terminal Building Complex as shown on Exhibit"C"and
consisting of ticket counter space, office and operations space, and outbound baggage space, and baggage
service desks.The square footage of floor area of the Exclusive Use Space,as shown and delineated on Exhibit
C, shall apply to this Agreement.
(B) Preferential Use Space. A portion of the Terminal Building Complex, as shown on Exhibit"D"
and consisting of Aircraft Parking Position(s) and Passenger Departure Lounge(s) and equipment, including
Passenger Loading Bridge(s). M10
Airport Use and Lease Agreement 12 Dated July 1, 2004
(C) Joint Use / Common Area Space. A portion of the Terminal Building Complex as shown on
Exhibit "B"consisting of Passenger Departure Lounges and Baggage Claim.
(D) TSA Explosive Detection System (EDS) Space Utilization. A portion of the Terminal Building
Complex as shown on Exhibit "C" and existing within the outbound baggage make-up area of the Airline's
Exclusive Use Space. This EDS space shall not be charged as Exclusive Use Space to the Airline and Airline
may pass through this space as necessary to conduct Airline business.
ARTICLE V
CALCULATION OF AIRLINE RATES AND CHARGES
Section 5.01 General Commitment
The City acknowledges that it is in the best interest of the to maintain reasonable rates and charges as
an integral part of the overall marketing of the facility.
Forthe purpose of establishing a rate making methodology that fairly allocates the net cost of operating
and maintaining the Airport among all of the Signatory Airlines a Single Cash Box Revenue Center approach
shall be utilized as defined in Section 1.46 of this Agreement.
Section 5.02 Preliminary Projection of Airline Joint Use/Common Area Space Fee.
At no later than ninety (90) days prior to the end of each Fiscal Year, Director of Aviation shall furnish
Airline with a financial and operational summary for the just completed fiscal year and a projection for the next
ensuing Fiscal Year including an estimate of the Joint Use/Common Area Space Fee and prorata allocation
of such fee to each Signatory Airline. The projection shall include, for the Airport in its entirety, the latest
available data on current operations of the Airport and an estimate of each of the following items for the next
ensuing Fiscal Year:
(a) Maintenance and Operations Expenses;
(b) Revenues;
(c) Debt Service;
(d) Capital Projects;
(e) Reserve Fund deposit requirements and Fund payments;
(f) Any changes in the number of square feet of any Signatory Airline's Exclusive Use Space;
(g) The Net Requirement, which establishes the Joint Use/Common Area Space Fee, and the
allocation of such fee among the Signatory Airlines; and �A
Airport Use and Lease Agreement 13 Dated July 1, 2004
(h) Summary Schedule of Total Airline Rates and Charges for each Signatory Airline (the
"Preliminary Projection of Airline Rates and Charges').
Section 5.03 Period From Effective Date Until Expiration Date of This Agreement
Commencing as of the Effective Date and continuing until the Expiration Date of this Agreement,
Airline's Rates and Charges,payable to City in the mannerdescribed in Article VII,shall consist of the following:
(A) Exclusive Use Space Fees. At such times and in such manner as provided in Article VII,Airline
shall pay forthe use of Exclusive Use Space,as described in Exhibit"C"based upon the total number of square
feet of Airline's Exclusive Use Space multiplied by the Exclusive Use Space Rate. The Exclusive Use Space
Rate for conditioned space, as depicted on Exhibit "C", shall be $20.63 per square foot per annum. The
Exclusive Use Space Rate for non-conditioned space, as depicted on Exhibit"C", shall be$10.32 per square
foot per annum.
(B) Preferential Use Space Fee. The fee for use of Airline's Preferential Use Space, as described
in Exhibit"D",except Passenger Loading Bridge(s), shall be included in the Net Requirement.Airline shall pay
a Passenger Loading Bridge Fee as set forth below.
(C) Joint Use/Common Area. At such times and in such manner as provided in Article VII,Airline
shall pay its prorata share for the use of Preferential Use Space as described in Exhibit"D", except Passenger
Loading Bridge(s), and Joint Use/Common Area Space as described in Exhibit"B"of the Joint Use/Common
Areas Space Fee,which is equivalent to the Net Requirement. The Joint Use/Common Area Space Fee shall
be prorated among all the Signatory Airlines according to the Joint Use Formula as defined in Section 1.29.
(D) Passenger Loading Bridges. At such times and in such manner as provided in Article VII,Airline
shall pay for the use of Passenger Loading Bridges on a per operation basis. For purposes of this section, an
"operation"shall mean both the enplaning and deplaning of a single aircraft.The Passenger Loading Bridge Fee
shall be $40.00 per operation.
(E) Adjustment of Fees. Not later than ninety (90)days prior to the third, sixth and ninth
anniversaries of the Agreement, the City and Airlines shall meet to discuss adjusting the Exclusive Use Space
Rate(s), the Landing Fee Rate, and the Passenger Loading Bridge Fee Rate. Such discussions do not
necessarily have to result in either an increase or decrease in such rates, and City agrees to give significant
consideration to Airline's comments before finalizing any change to such rates. In the event of disagreement
between the Airlines,or between theAirlines and City,the Director of Aviation shall make the final determination
regarding any adjustment to such rates. /57
A.�r
Airport Use and Lease Agreement 14 Dated July 1, 2004
Section 5.04 Landing Fees
At such times and in such manner as provided in Article VII,Airline shall pay a Landing Fee to City for
each Fee Landing of an aircraft operated by Airline. The Landing Fee shall be an amount equal to the product
of(i)the number of thousands of pounds of the Certified Maximum Landing Weight of the aircraft involved in
the Fee Landing, multiplied by (ii) the Landing Fee Rate.
The Landing Fee Rate shall be $1.25.
Section 5.05 Supplemental Space
In lieu of a supplemental agreement, Airline may elect to lease space at the Airport in the categories
of office trailer space, upstairs office space and open acreage, or other space as approved in writing by the
Director of Aviation, as supplemental space. Rates shall be as established in the City's Comprehensive Fee
Schedule. Specific space shall be identified in Exhibit F to this Agreement, and leased to Airline for a term not
to exceed the Expiration Date, but may be cancelled by either party upon thirty(30) days written notice.
The above referenced supplemental space may change from time to time with changes occurring via
letters of mutual agreement between Airline and the Director of Aviation.
Section 5.06 Special Capital Projects Fund
(A) The Fund. The City shall establish a separate airport budget activity,to be designated"Special
Capital Projects Fund"to be utilized for any Capital Project or a portion of the cost thereof(including equipment
purchases).Annual contributions to such Fund shall be made from a landing fee surcharge to all Airlines in the
total amount not-to-exceed $300,000 for the first year. The $300,000 shall be increased by $10,000 annually
until it reaches$350,000 annually,the level atwhich it shall remain forthe term of the agreement. Contributions
will be suspended during any period that such Fund balance is $850,000 or higher.
(B) Expenditures from the Fund. Single or multiple expenditures not exceeding the aggregate of
$250,000 in any Fiscal Year from the Special Capital Projects Fund may be made by the City without the
necessity for consent by, or approval of, the Signatory Airlines. Single expenditures of more than $250,000,
but less than $350,000 in any fiscal year will require submittal to Signatory Airlines for their advice which the
Airport may follow. Single expenditures of more than $350,000 in any Fiscal Year will require approval as
defined in Section 8.06 herein except when said expenditure is made as a required matching fund to a Federal
Grant. To further clarify, in any one fiscal year the Airport may utilize any amount in the fund for grant matching
plus utilize up to$350,000 for other Special Capital Projects and not be required to seek Airline approval under
Section 8.06.In addition to the utilization and expenditure authority granted this section 5.06,during any Fiscal
401,
Airport Use and Lease Agreement 15 ated July 1, 2004
Year that the Airport reasonably determines that the actual Net Requirement will exceed that projected for the
Fiscal Year, City may choose to utilize any funds available in the Special Capital Projects Fund to avoid or limit
a rate adjustment under section 5.08 below.
(C) The Surcharge. At such times and in such manner as provided for in Article VII, Airline shall
pay to City a Special Capital Projects Fund Surcharge. Such surcharge shall be collected on a per enplaning
passenger basis and established for each Fiscal Year by dividing the annual funding requirement of the Special
Capital Projects Fund, as set forth in section 5.06(A) above, by the total number of Enplaned Passengers for
the previous twelve months. Such surcharge shall be collected from Airline, and all other Aircraft Operators
offering Air Transportation service at the Airport. For each Fiscal Year, City shall collect such surcharge until
the amount collected is equal to the funding requirement forthat Fiscal Year,or until the Special Capital Projects
Fund balance reaches $850,000.
Section 5.07 Employee Vehicular Parking
The City shall make available to Airline's employees assigned to duty at the Airport reasonably adequate
automobile parking facilities. The City may, at its discretion, charge employees of Airline and others a
reasonable vehicular parking fee based on City's actual costs of providing, operating, and maintaining such
facilities.
Section 5.08 Insufficiency of Airport Revenues.Adjustment of Joint Use/Common Area Space Fees
(A) Right to Ad'us .Notwithstanding any other provision hereof,if,at any time while this Agreement
shall remain in effect, Director of Aviation determines that Airport revenues are, or likely will be, insufficient to
pay when due all costs and expenses of annual debt service requirements on all bonds, maintenance of rate
covenant on all bonds, maintenance, repairs or replacements City may, upon thirty(30)days'notice to Airline,
increase Joint Use/Common Area Space Fees provided for herein to such amount as is sufficient to assure
that actual revenues shall be sufficient to pay all such costs and expenses. City agrees that prior to such action,
upon twenty(20)days'notice to Airline, Director of Aviation will hold a meeting with Signatory Airlines to discuss
such charges.
(B) 1992 Bond Issue Coverage. The depreciation of the City's investment in the Airport(excluding
federal gifts and grants in aid), and/or an amount necessary to produce for collection by the City Net Revenues,
as defined in that First Amended and Restated Installment Sale Agreement by and between the City of Palm
Springs (the "City") and the City of Palm Springs Financing Authority dated as of August 1, 1992 relating to
$16,265,000 City of Palm Springs Financing Authority(the"Authority") (Palm Springs Regional Airport)Airport
/G.t 14
Airport Use and Lease Agreement 16 ated July 1, 2004
Revenue Bonds, Series 1992 (the "Installment sales Agreement") and that Master Trust Indenture by and
between the Authority and First Interstate Bank of California dated as ofAugust 1, 1992 relating to$16,265,000
City of Palm Springs Financing Authority(Palm Springs Regional Airport)Airport Revenue Bonds, 1992 Series
(the "Master Indenture"), in each fiscal year which, together with other available funds, as defined in the
Installment Sale Agreement, are at least equal to 1.25 times Maximum Annual Debt Service, all is provided in
Section 6.17 of the Installment Sale Agreement, or any amendment or supplement to said issuing Parity Debt,
as defined in the Master Indenture or otherwise. Further,and without limitation,the fees established herein may
be readjusted by the City either annually, or, in the City's discretion, upon thirty(30)days notice to the Airline,
on a residual cost basis as described in the Report of the Airport Consultant delivered to the City dated February
15, 1991 and in such amount as to satisfy the covenants contained in Section 6.17 of the Installment Sale
Agreement, or any other rate installment sale agreement adopted for the purposes of issuing Parity Debt or
otherwise. In making the adjustment described herein,consideration shall be given to all bonds and other forms
of indebtedness issued and outstanding at the time of the adjustment by the City, the Authority and any other
issuer which issues bonds or otherforms of debt on behalf of the Airport provided, however,as to any one item,
consideration is to be given to either debt service or depreciation but not both. In allocating costs and revenues
to the various facilities as herein above defined,the City will apply and observe generally accepted accounting
principals.
(C) Other Bond Issues. In 1998 the Airport issued Passenger Facility Charge Bonds (1998 PFC
Bonds)in the amount of$12,720,000 and General Airport Revenue Bonds(1998 GARB)in the
amount of$8,260,000 for the construction of the Sonny Bono Concourse.
Section 5.09 Annual Adiustment to Joint Use Common Area Space Fees
Within one hundred twenty(120) days after the close of each Fiscal Year the City will recompute the
rates applicable to the fees and charges payable by Airline for its use of the Premises for the preceding Fiscal
Year, based upon actual space utilization, activity, costs and expenses, and revenues. If the recalculation
results in a variance from the rates charged the Airline for that Fiscal Year, Director of Aviation will calculate an
additional charge or credit against Airline's fees and charges. Such charge or credit shall be payable in equal
monthly installments over twelve (12) months. Airline agrees to pay any such additional charge as billed in
accordance with the foregoing. Airline's obligation to pay such additional charge shall survive any termination
of the Agreement.
Section 5.10 Costs Excluded
Airport Use and Lease Agreement 17 Dated July 1, 2004
The portion of capital costs of the Airport, its facilities and improvements paid for from the Special
Capital Projects Fund, or by Federal Grants-in-Aid or by contributions from other cities, and depreciation,
amortization and interest charged thereon, if any, shall not be included in the cost factors herein.
Section 5.11 Other Charges
In the event City is required to furnish special law enforcement services under 49 CFR Part 1542; fire
and crash protection and other emergency response provisions under FAR, Part 139; and a security access
system under 49 CFR 1542 or is required to make additional expenditures by any Federal, State or other
governmental order, rule or regulation during the term of this Agreement, the cost and expense thereof shall
be allocated to the Single Cash Box Cost Revenue Center.
City may from time to time, on reasonable notice to Airlines, determine and impose compensatory
service charges for non-routine apron and ramp cleaning and scrubbing,apron housekeeping and otherspecial
services requested by Airline or made necessary by non-compliance of Airline with City's rules and regulations.
Section 5.12 Non-Signatory Airlines Rates and Charges
It is acknowledged that the methodology for calculating rates and charges for Signatory Airlines involves
risk to the Signatory Airlines in that rates and charges imposed on Signatory Airlines could in certain instances
require the absorption of Airport deficits due to shortfalls in a variance in City's projected revenues and
expenses at the Airport for a particular Fiscal Year. In recognition of this risk the methodology for calculating
rates and charges for the Signatory Airlines provides for the possibility of reduction of rates and charges by the
crediting of surplus resulting when the Joint Use/Common Areas Space Fees paid by the Signatory Airlines
exceeds the actual Joint Use/ Common Area Space Fee required each Fiscal Year. In view of the fact that
Airlines who are not signatory to this Agreement("Non-Signatory Airlines") will not assume the risk of deficits
it is agreed that they should not receive the benefits of any surplus. It is agreed that in view of the fact that Non-
Signatory Airlines will avoid the risks outlined above, that the City shall establish and charge the rates to Non-
Signatory Airlines ("Non-Signatory Rates") as follows:
(A) Landing Fees: 125% of the Landing Fee paid by the Signatory Airlines.
(B) Joint Use/Common Area Space Fee:A fee paid on a per enplaning passenger basis.Such fee
shall be calculated by dividing the projected Joint Use/Common area Space Fee foreach Airline by the number
of Enplaning Passengers for Airline for the previous twelve months.Then,after deleting from consideration the
highest and lowest figures from such calculation,averaging the figures forthe remaining Signatory Airlines times
125%. /%f a
WO
Airport Use and Lease Agreement 18 Dated July 1, 2004
(C) Special Capital Projects Fund Surcharge: 125% of the charges set in Section 5.05 (A).
(D) Passenger Loading Bridge Fee: 125%of the Passenger Loading Bridge Fee paid by Signatory
Airlines.
(E) Such other charges for special facilities or activities as deemed appropriate by the City and
established in the City's Comprehensive Fee Schedule.
ARTICLE VI
IDENTIFICATION AND ALLOCATION OF REVENUES AND EXPENSES
Section 6.01 City Records
City shall maintain accurate records of Maintenance and Operations Expenses, Reserve Fund deposit
requirements, Debt Service payments, small capital expenditures and Revenues for each Fiscal Year.
Section 6.02 Disposition of Airport Revenues
All revenues received or otherwise realized by City, or remaining in reserves at the end of the term of
this Agreement, arising from its operation of the Airport shall remain the property of City, and shall not be
expended forany purpose otherthan the acquiring,establishing,securing,developing,extending, maintaining,
operating, managing and promoting the Airport.
Section 6.03 Debt Service
City shall maintain accurate records of the City's Debt Service for each Fiscal Debt Service shall be
based on actual expenditures made out of the proceeds of bonds,notes,certificates of participation and/orother
Airport obligations giving rise to such Debt Service.
Section 6.04 Maintenance and Operations Reserve Fund
The Maintenance and Operations Reserve Fund was established prior to the Effective Date of this
Agreement and shall be used only to make loans to the Maintenance and Operations Fund whenever and to
the extent monies in the Maintenance and Operations Fund are insufficient to pay Maintenance and Operations
Expenses.
The Maintenance and Operations Reserve Fund balance for the fiscal year ending June 30,2004 fiscal
year shall be $1,573,352. Each year thereafter the City shall make a deposit from Airport's revenues in the
amount necessary to increase the balance therein (including amounts receivable from the Maintenance and
Operations Reserve Fund)to an amount equal to 15%of the Maintenance and Operations Expenses amount
provided in the Airport's annual budget for such Fiscal Year. 19YW
Airport Use and Lease Agreement 19 Dated July 1, 2004
Section 6.05 Landside Development Reserve Fund
(A) The Fund. There is herein created a Landside Reserve Fund which shall be used by the City for other
than terminal and airfield improvements and may be utilized for advertising. The Landside Reserve Fund deposit
shall be $250,000 per year. Contributions to such fund shall be obtained by adding $250,000 annually as an
expense in the Single Cash Box Revenue Center; provided that no further contributions will be made when the
fund balance reaches $750,000.
(B) Expenditures from the Fund. City may make single or multiple expenditures from the Landside
Reserve Fund without the necessity for consent by, or approval of, the Signatory Airlines.
(C) Limitation on the Fund. The City may utilize the fund for grant matches on Airport Improvement
Program eligible landside programs. Construction development expenditures from such fund, on other than
Landside Area grant projects, are appropriate so long as these improvements lead to the prudent development
of facilities that are financially self sustaining. Such fund may also be utilized for Airport advertising or air service
incentive programs. Said advertising and air service incentive programs are consistent in nature and content to
provide equal right and access to funds as in accordance with FAA revenue diversion policies. Said overall
advertising and incentive program is adopted annually by City Council resolution and is a program for the financial
benefit of the Airport and its Air Carriers by the nature of adding new routes and service.
ARTICLE VII
PAYMENT OF AIRLINE RATES AND CHARGES
Section 7.01 Payment of Airline Rates and Charges
(A) Information to be Provided by Airline. Airline shall furnish to the City on or before the tenth (10th)
day of each month on forms to be supplied by City and signed by an authorized representative of Airline, for the
preceding month reporting (1)the number of Enplaned Passengers and deplaned passengers; (2)Airline's total
number of Fee Landings by type of aircraft and Certificated Maximum Landing Weight of each type of aircraft; (3)
the weight of air freight, air-express, and air mail, loaded and unloaded by Airline at the Airport; (4) the 30-day
projected published flight schedule for arriving and departing flights at the Airport; (5) the number of Enplaned
Passengers and deplaned passengers and number Fee Landings, by type of aircraft, for which Airline provided
handling services of any kind for other Aircraft Operators,and the names and addresses of the Aircraft Operators
so that the City may submit to such operators appropriate invoices for Landing Fees and other charges; (6) the
number of training and test flights, the time of day during which these flights occurred, and the Landing Weight
I?
Airport Use and Lease Agreement 20 Dated July 1, 2004
of each type of aircraft; (7) the number of seats per each type of aircraft utilized; and (8) the total number of
Passenger Loading Bridge operations.
(B) Airline Rates and Charges Due in Advance. Not later than the tenth(10th)day of each month of
each Fiscal Year,City shall furnish Airline with an invoice setting forth the amount of Airline's Exclusive Use Space
Fees, Joint Use/Common Area Space Fees and other Airline Rates and Charges due in advance for the next
ensuing month and the Airline shall pay City the amount of such invoice on or before the first(1 st)day of the next
ensuing month.
(C) Airline Rates and Charges Due in Arrears. Upon furnishing City with the information described
in Section 7.01(A), City shall forthwith furnish Airline with an invoice setting the amount of Airline's Landing Fees,
Special Capital Projects Fund Surcharge, Loading Bridge Fees, and other Airline Rates and Charges due in
arrears, payable by the Airline for the preceding month's activity and Airline shall pay City the amount of such
invoice within thirty (30) days of the date of such invoice.
Section 7.02 Late Charges.
All fees and charges not timely received by City and within fifteen (15) days after receipt by Airline of a
written notice of delinquency will bear a late charge equal to five percent(5%) of the payment due and owing.
If such rentals, fees and other charges are not received with thirty (30) days, after such notice, interest shall
accrue on the unpaid balance plus the unpaid late charge at the rate of eighteen percent(18%)per annum or the
highest rate which may be legally charged, whichever is lower, from the due date until paid in full.
Section 7.03 Provision Against Set-Offs
It is the obligation of Airline to pay all fees and charges, free of any set-offs or claims, in the amount and
at the times specified in this Agreement. In the event that Airline desires to contest the validity or amount of any
such fees and charges, Airline shall first pay the same to City and may then seek a refund in any appropriate
forum.
ARTICLE VIII
PRINCIPLES RELATING TO RATES AND CHARGES
With respect to the Airline Rates and Charges imposed by this Agreement, it is agreed that the following
principles shall be observed.
Section 8.01 General Concepts
AW
Airport Use and Lease Agreement 21 Dated July 1, 2004
The administration and control of all concessions(including vending machines and pay telephones)in the
Terminal Building Complex and elsewhere on the Airport is exclusively reserved to the City.
Airline shall not install or operate pay telephones,vending machines oramusement machines and devices
of any kind in the Terminal Building Complex or elsewhere on the Airport however, subject to the Director of
Aviation's written approval,Airline may have such machines and devices installed if such shall be for the use of
Airline's employees only and shall be located in Airline leased areas not accessible to the general public.
Section 8.02 Accounting Principles and Audit Report
Generally accepted accounting principles, consistently applied, recognizing the special requirements of
airports,will be used by the City for keeping the books,accounts and records of the Airport and in the computation
of all rates and charges.
Within nine (9) months, and upon request, after the close of each Fiscal Year, City shall furnish Airline
with a copy of an annual audit report, prepared in accordance with generally accepted accounting principles and
certified by an Independent Accountant, covering the operation of the Airport for such preceding Fiscal Year.
Section 8.03 Cost or Expense Allocation
All revenues, costs and expenses directly attributable to the Airport shall be charged to the Single Cash
Box Cost Revenue Center.
Section 8.04 City to Exercise Prudence
The City agrees to exercise prudence in the operation,maintenance,improvement,expansion,promotion,
management and financing of the Airport.
Section 8.05 Additional Capital Expenditures
It is understood that from time to time the City will make additional expenditures for capital improvements
and capital asset purchases at the Airport, or in relation to the Airport such as:
a) Projects that are mandated by the Federal Aviation Administration or Transportation Security
Administration or are necessary in order to comply with laws, rules and regulations of Federal
Aviation Administration or any other government agency.
b) Projects relating to the Airside Areas that are indicated in the Airport Layout Plan, as it may be
amended from time to time, that have been reviewed and conditionally approved by the Federal
Aviation Administration, and that will be undertaken by the City when federal grants are available
to fund a substantial portion of the expenditure and it is prudent to undertake the Project.
c) Projects that would enhance the safety and security of the Airport.
Airport Use and Lease Agreement 22 Dated July 1, 2004
d) Projects to repair casualty damage to Airport property, preventative pavement maintenance and
the repair, replacement or unscheduled maintenance of equipment used in the operation of the
Airport.
e) Purchase of land that may be required for any of the foregoing projects when prudent to do so
when the majority of the cost is funded by the Federal Aviation Administration.
f) Special projects, including but not limited to international arrivals facilities the cost of which shall
be entirely borne by the beneficial user of the improvement or asset for which the expenditure
was made.
g) Projects to be funded with the Special Capital Projects Fund pursuant to Section 5.05.
h) Projects to be funded from the Landside Development Reserve Fund pursuant to Section 6.05.
I) Projects to be funded from any special contribution received from any Coachella Valley city.
j) Other projects, not described above that may be prudent, in the operation and maintenance of
the Airport or in the preparation for the prudent expansion of the Airport and/or any of the Airport's
facilities.
k) Such other projects and expenses as the Signatory Airlines may authorize for their own purposes.
The amortization of costs plus interest and other expenses associated therewith not covered by funding
previously contributed by the Signatory Airlines,grants and participating funds from the United States of America
and the State of California, County or any special contribution from other cities or any agency thereof, including
all payments,deposits and other requirements relating to the issuance of bonds,notes,certificates of participation
and payments to banks and other lenders shall constitute an expense when such projects are on or at the Airport
and shall be chargeable to the Single Cash Box Cost Revenue Center; provided that prior to making any
expenditure for projects in c), i), j) and k) above, the City has received Airline approval, per Section 8.06. It is
agreed that City may proceed with projects described in a), b), d),e),0,g)and h)above without Airline Approval.
Section 8.06 Airline Approval
The Airline approval of Capital Projects outlined in Section 8.05 c), i),j) and k) shall be obtained by the
City submitting a proposal in writing therefor to all Signatory Airlines which proposal shall include an estimate of
the budget for and a description of such Capital Project and the Maintenance and Operation Expenses resulting
therefrom;and the construction schedules for such Capital Project, if applicable. Airline may within ten(10)days
request a meeting with the City's representatives to discuss the project and parties agree to schedule said
meeting within twenty (20) days after said request. Airline agrees to furnish City in writing, its approval or
/ 1W � 3
Airport Use and Lease Agreement 23 6f ted July 1, 2004
disapproval of the project within thirty(30)days after said meeting or thirty(30)days after the initial notice from
City, if a meeting was not requested; it being agreed that the Airline's failure to timely furnish its approval or
disapproval will be deemed to be Airline's approval of the project. Approval shall be based on Signatory Airlines
representing 50% of the Enplaned Passengers at the Airport.
Section 8.07 Grants
Consistent with good business practices,the City agrees to prudently seek the maximum amount of grants
and participating funds for the Airport from the United States of America and the State of California, and any
agency thereof,and advise the Airlines of such application by direct notice or by incorporating anticipated amounts
in proposed budgets.
Section 8.08 Bonded Indebtedness
City shall issue no additional bonded indebtedness for airport improvements,except for a refunding of the
1992 Bond Issue for the first two years of this Agreement without first receiving Airline approval via the process
outlined in Section 8.06.City furtheragrees to take on no additional indebtedness for airport improvements which
would adversely effect the rate base by more than$400,000 in any one yearwithout first receiving Airline approval
via the process outlined in Section 8.06.
Section 8.09 Outside Storage
Airline takes notice of the factthat City has entered and intends to enter into various fixed based operators
agreements with third parties to provide aviation-related services to the public which include among other things
the rental of aircraft outside storage areas. In the event Airline requires outside storage (i.e. storage other than
on airport owned aircraft aprons ortaxiways)of its aircraft,such storage shall be subject to user charges adopted
from time to time by such fixed based operators.
ARTICLE IX (Not Utilized)
ARTICLE X
MAINTENANCE, OPERATION, USE AND CONDITION OF PREMISES
Section 10.01 Maintenance and Operation of the Premises
The responsibility for maintaining,operating and repairing the Premises, including the cost of utilities and
energy consumption and the insurance referred to in Article XII hereof, shall be divided between the City and
Airline in accordance with Exhibit E, and the cost of such maintenance operations and repairs shall be paid by
Airport Use and Lease Agreement 24 at d my 1, 20
Airline directly for those items and facilities designated on said Exhibit as being its responsibility and indirectly
through Airline Rates and Charges for those items and facilities designated on said Exhibit as being the City's
responsibility. City and Airline agree to undertake their respective maintenance and operating responsibilities
assigned to each by Exhibit E in such a manner so as to maintain the Premises in a good, sanitary, safe and
presentable order and condition. In fulfilling said respective responsibilities, City and Airline may act on its own
behalf using its own personnel or may contract with a third party so long as the Premises are maintained and
operated in such order and condition, provided that such personnel are properly permitted to operate at the
Airport.
Section 10.02 Maintenance and Operation of Airport by City
Subject to the other provisions of this Article X,including Section 10.01 thereof,City agrees that it will,with
reasonable diligence, prudently operate, develop, improve and keep in good repair, the Airport and all
appurtenances, facilities, and services now or hereafter connected therewith; and maintain the Airport in all
respects in a manner at least equal to an acceptable standard or rating established by the Federal Aviation
Administration.
Section 10.03 Accommodations of Other Incoming Aircraft Operators
Airline agrees to make every reasonable effort to offer to any incoming Aircraft Operator the opportunity
to share use of its Exclusive Use Space as described in Section 4.01. In determining whether the use of another
incoming Aircraft Operator is reasonable and possible, Airline will have the right to consider the compatibility of
the proposed operations of those with whom Airline has subleases or handling arrangements,Airline's existing
and future flight schedules, the need for labor harmony, the adverse competitive impacts resulting from the
presence of the other Aircraft Operator on Airline's Exclusive Use Space,and the availability of other such space
at the Airport. Should Airline refuse another incoming Aircraft Operator the opportunity to use said Airline's
Exclusive Use Space, City may review Airline's space usage, and should it reasonably determine, considering
all the factors noted herein including Airline's reasons for such refusal, that Airline unreasonably refused usage
by such other Aircraft Operator,it may require Airline to permit the Aircraft Operator to use Airline's Exclusive Use
Space, subject to the incoming Aircraft Operator executing an agreement with Airline acceptable to the City.
Section 10.04 Gate Positions and Loading Ramps
(A) Assignment of Gate Positions and Loading Ramps. All assignment of gate positions and aircraft
loading ramps shall be made in strict accordance with reasonable rules, regulations and directives adopted and
promulgated by the Director of Aviation consistent with the Airline Deregulation Act of 1978. The Director of
" _
Airport Use and Lease Agreement 25 Da e July 1, 2004
Aviation, in making preferential but non-exclusive assignments of gate positions to Airline users, shall take into
account the needs and requirements of Airline for use of gate positions. As of the date of this Agreement,the gate
allocation formula provided by the Director of Aviation is shown in Exhibit G attached. The Assignment of one
preferential gate position for the term of the lease, so long as the Signatory Airline operates at least 6 months of
the year,shall accrue to all Signatory Airlines executing this agreement prior to January 1,2005 until all gates are
allocated. If an Airline is reassigned to a different gate, at the request of another Airline or the Airport, for its own
reasons, the requesting Airline or the Airport, as applicable, shall pay for the reasonable costs of relocation.
Section 10.05 Aircraft Parkinq Position(s)
Airline shall perform all services pertinent to the operations in keeping the loading ramps adjacent to its
Aircraft Parking Position(s)in a neat, clean and sanitary condition free of litter,trash,debris and other waste and
refuse matter, all in keeping and consistent with first-class passenger terminal facilities of other major airports
throughout the United States. No maintenance activity other than traditional line maintenance may take place at
a gate parking position.
Section 10.06 Public Areas
Subject to the rights hereby reserved by City to license, permit, authorize, regulate and locate
concessionaires and other tenants therein, including, without limiting the generality thereof, booths, counters,
offices, lockers, wall space and vending machines, Airline, its passengers, patrons, business invitees, agents,
servants, officers, employees and the public shall have the free non-exclusive right of use of all of the public
unrented areas, as they may exist from time to time in the Terminal Building Complex.
City undertakes to so regulate, maintain and operate said public areas to best serve the interest of the
public, building tenants, patrons and visitors at the Airport and to permit, in said public areas, only such functions
and concessions that will not interfere with the public access to Airline's exclusive or nonexclusive use areas and
as are compatible to the purpose of providing a first-class air transportation facility.
Section 10.07 Signs
(A) Signs Installed by Airline. Airline shall maintain all signs installed by it in the Premises in a neat
and attractive condition and appearance.Airline shall allow with Airport's written approval,other secondary users
and itinerant operators of Airline's Preferential Use Space to install identifying signs when secondary users and
itinerant operators utilize Airline's Preferential Use Space for an aircraft arrival or departure for the purpose of
loading and unloading passengers.
Airport Use and Lease Agreement 26 Dated July 1, 2004
(B) Signs Installed by City. City shall install all signs necessary or required for the direction of
pedestrian and vehicular traffic on the sidewalks,ways and roads within the Terminal Building Complex,including
such signs as it determines are necessary on the roadways leading from the public streets to said Terminal
Building Complex. All directional signs in the Terminal Building Complex including any additions thereto shall be
installed by City. No signs or advertisements pertaining to Airline's Air Transportation business shall be installed
or maintained outside of or within the Premises on the Airport until Airline shall have submitted to the Director of
Aviation for his approval, in writing, such drawings, sketches, design dimension and type and character of such
signs and advertisements proposed to be placed therein or thereon and any payment, conditions, restrictions or
limitations in respect to the use thereof stated by the Director of Aviation in his written approval therefor shall
become conditions hereof as if set forth herein at length.
Section 10.08 Alteration, Repair Maintenance Remodeling, Expansion Removal and/or Improvement
of the Facilities of Terminal Building Complex or Its Appurtenances
It is understood and agreed by and between the parties hereto that the City may alter, repair, maintain,
remodel, expand, remove or improve any of the facilities of the Terminal Building Complex or any of its
appurtenances, including space leased to Airline pursuant to this Agreement or other agreements related to such
facilities at any time during the term hereof subject to the provisions of this Agreement.
If however, it becomes necessary for the City to reassign or relocate Airline Preferential Use Space, City
shall give Airline reasonable advance notice of such action and shall make available alternative space that is
reasonably comparable for Airline's operations at the same rates and charges which Airline would have paid for
the space being surrendered. Airline shall surrender its space promptly to City, provided that Airline shall be
reimbursed for the reasonable cost of any such reassignment, reallocation or relocation and the cost of Airline's
unamortized investment, if any, as documented by Airline to the satisfaction of the City.All of such costs, as well
as City's cost of providing the alternative space aforementioned, shall be included in the cost of the particular
Capital Project requiring such reassignment, reallocation or relocation.
Section 10.09 Airport Security- Federal Regulations
(A) Security Screening Facilities. As of the date of this Agreement, the Transportation Security
Administration provides for all passenger and baggage screening conducted at the Airport. Airlines may be
required to provide assistance to TSA in their efforts to carry out their federal mandates. At some point during
the Agreement Term the Airport or other entity may be authorized to provide these services.
1g #937
Airport Use and Lease Agreement 27 Dated July 1, 2004
(B) AirportAccess Control System. Airline agrees to pay its prorata share of the costs associated with
the Airport access control system as is or may be required to be implemented by 49 CFR Part 1542.The pro rated
costs of implementing,operating and maintaining the access control system will be recovered through Joint Use
/Common Area Space Fee.
Section 10.10 Utilities
Airline may use all the electrical power outlets of City located in or about the Premises including their
Aircraft Parking Positions and ramp area or adjacent thereto and the cost thereof shall be charged to the Single
Cash Box Cost Revenue Center.
Airline expressly waives any and all claims against City for compensation for any and all loss or damage
sustained by reason of any defect, deficiency or impairment of any water supply system, drainage or sewer
system, gas supply system,telephone,system, electrical supply system, or electrical apparatus or wires serving
the Premises. All costs for water, gas, heat or electricity used in connection with the heating or air conditioning
furnished to the Premises by City as part of the basic charge for said Premises shall be paid by City.
Notwithstanding, should Airline use electrical power in excess of what is reasonably required for its normal
operations, City reserves the right to require Airline,at its expenses,to promptly install meters as provided above
and pay for all electrical power consumed thereafter.
Section 10.11 Trash, Garbage Aircraft Sewage and Other Refuse
City shall provide a complete and proper arrangement for the adequate, sanitary handling and disposal,
away from the Airport, of all trash, garbage, aircraft sewage and other refuse caused as a result of the operation
of its Air Transportation business and charges therefor shall be allocated to the Single Cash Box Cost Revenue
Center. Piling of boxes, cartons, barrels or other similar items in an unsightly or unsafe manner on or about the
Premises by Airline is forbidden.
Section 10,12 Vehicles and Automotive Equipment on Airside Area and Aircraft Parking Positions
City reserves the right to regulate, by adoption of rules or other means,subject to Section 3.01(K)hereof,
the use of vehicles and automotive equipment upon, over and across the Airside Area. In the event of an
emergency not specifically provided for in said rules and regulations, the Director of Aviation or a designated
representative on duty at the time of such emergency shall have the power to take charge of the direction of such
vehicle and automotive traffic in the area affected and regulate the same until the cause of such emergency has
been removed. The existence of an emergency, other than an aircraft emergency, shall be determined by the
Director of Aviation or a designated representative.
1919W
Airport Use and Lease Agreement 28 Dated July 1, 2004
Section 10.13 Security Deposit
Airline, on execution of this Agreement, shall deposit with City an aggregate sum in cash, letter of credit
or bond, which letter of credit or bond shall be in a form and content satisfactory to the City, equal to two (2)
month's Airline's Terminal Rates and Charges and Landing Fees specified in Article V hereof, as a security
deposit to guarantee the faithful performance by Airline of its obligations under this Agreement and the payment
of all fees and charges due hereunder. Airline shall be obligated to maintain such security deposit in effect until
the Expiration Date of this Agreement. In each Fiscal Year,Airline will be required to adjust the amount of such
security deposit to reflect Airline's current Fiscal Year's terminal fees and charges and Landing Fees as projected
by the Preliminary Projection of Airline Rates and Charges and Mid-Year Adjustment of Airline Rates and Charges
for such Fiscal Year. If Airline has not been in default of any of the provisions of this Agreement as prescribed
in Section 19.01, or earlier Agreements for a continuous eighteen (18) month period City will waive the
requirement for security deposit and return the security deposit to Airline, if such a deposit has been made. City
shall not be required to pay any interest to Airline on any amount held in deposit.
Security deposits provided by third parties, including bonding companies and financial institutions,shall
be properly licensed to do such business in the State of California and subject to the approval of City. In the event
that any such security deposit shall be for a period of less than the full period required by this Agreement, or if
such security deposit may be cancelled, Airline shall provide a renewal or replacement security deposit for the
period following the expiration or cancellation of such security deposit previously provided at least sixty(60)days
prior to the date on which such previous security deposit expires or at least sixty(60) days prior to the effective
date of such cancellation.
If Airline shall commit an Event of Default under Section 19.01 of this Agreement,City shall have the right
to use the security deposit, or any portion thereof, to cure the default or to compensate City for all damage
sustained by City resulting from Airline's default. Airline shall immediately on demand pay to City a sum equal
to the portion of the security deposit expended or applied by City, as provided in this Section, so as to maintain
the security deposit in the sum initially deposited with City or renew said bond.
ARTICLE XI
NO OTHER CHARGES
Section 11.01 No Other Charges
/4 3
Airport Use and Lease Agreement 29 Dated July 1, 2004
The City agrees that no fees or charges other than those expressly set forth in this Agreement, shall be
charged or,collected by it from Airline or Airline's passengers, vendors or employees for the use of any of the
premises, facilities, rights, licenses and privileges granted by this Agreement, however, notwithstanding the
foregoing, City shall not be prevented from:
(a) entering into use agreements or leases with others for space and facilities at the Airport or from
requiring and issuing permits for the use of such space and facilities, or
(b) levying uniform catering fees on in-flight food and beverage caterers which service aircraft
operating at the Airport and charge such caterers rentals for any facilities which they lease on the Airport for their
exclusive use or for their joint use with others, or
(c) assessing and collecting a head tax, passenger boarding tax, passenger facility charge, use fee,
or similar charge upon passengers using the Airport, or any of its facilities or services as, if, and when such tax,
fee or similar charge becomes lawful by the repeal or modification of the Federal Anti-Head Tax Act (49 USCA
Section 1513), or otherwise, or
(d) entering into agreements with Airline for additional facilities which provide for a separate and
additional charge to Airline, or
(e) imposing a charge for public vehicular parking at the Airport or employee vehicular parking
referred to in Section 5.07 of this Agreement, or
(f) imposing ground transportation fees, or
(g) imposing a fuel flowage fee on fixed base operators and other similar service contractors using
space and facilities at the Airport who may be engaged by Airline or other aircraft operators to provide and
dispense fuel to their aircraft, or
(h) imposing a fee for the issuance of security badges, access cards,and other access media at the
Airport.
(i) imposing a cost based cable management fee to gain access to and utilize the Airport's fiber optic
systems.
ARTICLE XII
INDEMNITY AND INSURANCE
Section 12.01 Indemnification of Airport
19A
Airport Use and Lease Agreement 30 Dated July 1, 2004
Airline agrees to indemnify the City, its officers, agents and employees against, and will hold and save
them and each of them harmless from,any and all actions,suits,claims,damages to persons or property,losses,
costs, penalties,obligations, errors, omissions or liabilities, of or in connection with the negligent performance of
the work,operations or activities of Airline, its agents,employees,subcontractors,or invitees, provided for herein,
or arising from the use of the Premises or the Airport by Airline or its employees and customers, or arising from
the failure of Airline to keep its exclusive Premises in good condition and repair,as herein provided,or arising from
the negligent acts or omissions of Airline hereunder, or arising from Airline's negligent performance of or failure
to perform any term,provision covenant or condition of this Agreement,whether or not there is concurrent passive
oractive negligence on the part of the City,its officers,agents or employees but excluding such claims or liabilities
arising from the sole negligence orwillful misconductof the City,its officers,agents oremployees,who are directly
responsible to the City, and in connection therewith:
(a) Airline will defend any action or actions filed in connection with any of said claims or liabilities and
will pay all costs and expenses, including legal costs and attorneys'fees incurred in connection
therewith;
(b) Airline will promptly pay any judgment rendered against the City,its officers,agents or employees
for any such claims or liabilities arising out of or in connection with the negligent performance of
or failure to perform such work, operations or activities of airline hereunder; and Airline agrees
to save and hold the City, its officers, agents, and employees harmless therefrom;
(c) In the event the City,its officers,agents or employees is made a party to any action or proceeding
filed or prosecuted against Airline for such damages or other claims arising out of or in connection
with the negligent performance of or failure to perform the work, operation or activities of Airline
hereunder, Airline agrees to pay to the City, its officers, agents or employees, any and all costs
and expenses incurred by the City,its officers,agents or employees in such action or proceeding,
including but not limited to, legal costs and attorneys' fees.
Section 12.02 Airline Public Liability Insurance
Airline agrees to carry and keep in force public liability insurance with an insurance company of
recognized responsibility, or provide self insurance, covering personal injury, death and property damage to
protect the City, its commissioners, directors, agents, officers, and employees, from liability covered by the
indemnification provisions of this Article subject to policy terms, conditions, limitations and exclusions. Without
limiting its liability as aforesaid, Airline agrees to carry and keep in force such insurance, written on a per
Airport Use and Lease Agreement 31 Da fed July 1, 4
occurrence basis,with limits of liability for death, personal injury and property damage in a combined single limit
not less than Fifty Million Dollars ($50,000,000), except Twenty Five Million Dollars ($25,000,000)with respect
to non-passenger personal injury liability. An Airline shall have the right to self-insure the items specified in this
Section 12.02, Section 12.03 and Section 12.05 so long as Airline maintains a net worth satisfactory to the City's
Risk Manager.
Section 12.03 Workers Compensation Insurance
Airline shall, at the Airline's sole cost and expense,maintain a policy of worker's compensation insurance
in an amount as will fully comply with the laws of the State of California and which shall indemnify, insure and
provide legal defense for both the Airline and the City against any loss, claim or damage arising from any injuries
or occupational diseases occurring to any worker employed by or any persons retained by the Airline in the course
of conducting Airline's business in the Airport.
Section 12.04 City Public Liability Insurance
The City shall maintain in force during the term of this Agreement public liability insurance protecting the
City from claims of bodily injury and property damage liability arising out of the ownership, maintenance, use and
occupancy of the premises for amounts to be determined by the City.
Section 12.05 Fire and Extended Coverage Insurance-Terminal Building Complex
The City agrees to maintain in force during the term of this Agreement fire and extended coverage
insurance on the Terminal Building Complex and any additions, alterations, or modifications thereto and on all
contents owned by the City usual and incidental to the Terminal Building Complex for an amount of not less than
ninety(90) percent of the full replacement value thereof(hereinafter referred to as "City Insurance").
Airline shall purchase similar insurance on its contents, improvements, betterments and other incidental
personal property (hereinafter referred to as "Airline Insurance"), or shall self insure.
The City and Airline hereby mutually release and discharge each other from all claims or liabilities arising
from or caused by fire or other casualty covered by the aforementioned insurance on the Terminal Building
Complex or contents and personal property in, at or on the Terminal Building Complex. All such policies shall
include a waiver of subrogation with respect to the provisions of this Agreement to the extent insurance proceeds
are actually received.
Section 12.06 Airline Insurance on Automobiles and Other Ground Vehicles
Airline shall maintain at is sole expense and cause to be kept in force at all times during the term of this
Agreement, liability insurance in the form of primary and excess, or layered amounts of insurance covering the
�Ad it1d v�
Airport Use and Lease Agreement 32 Dated July 2 04
operation of Airline's owned or non-owned automobiles and other ground vehicles at the Airport,written on a per
occurrence basis in a combined single limit of not less than Twenty Five Million Dollars ($25,000,000)for bodily
injury and property damage liability per any one occurrence.
Section 12.07 Commercial General Liability Insurance.
A policy of commercial general liability insurance written on a peroccurrence basis with a combined single
limit of at least$1,000,000 bodily injury and property damage including coverages for contractual liability,personal
injury, independent contractors,property damage,products and completed operations.The Commercial General
Liability Policy shall name the City of Palm Springs as an additional insured in accordance with standard ISO
additional insured endorsement form CG202010(1185)or equivalent language. The Commercial General Liability
Insurance shall name the City, its officers, employees and agents as additional insured to the extent of their
indemnified interest.
Section 12.08 General Provision Applicable to Airline's Insurance
All of the policies of insurance required to be procured by Airline pursuant to this Article XII shall (i) in a
form and content common to the industry and reasonably satisfactory to the City and written by insurers
satisfactory to the City; be(ii) primary insurance; and shall(iii)name the City, its officers, employees and agents
as additional insureds to the extent of their indemnified interest. All of said policies of insurance shall provide that
said insurance may not be amended or cancelled without providing 30 days prior written notice by registered mail
to the City. Prior to the Effective Date or such earlier date as Airline takes possession of the Premises for any
purpose; and at least 30 days prior to the expiration of any insurance policy, Airline shall provide City with
certificates of insurance or appropriate insurance binders evidencing the above insurance coverages written by
insurance companies acceptable to the City licensed to do business in the state where the Premises are located.
In the event the City Manager determines that (i)the Airline's activities in the Premises creates an increased or
decreased risk of loss to the City, (ii) greater insurance coverage is required due to the passage of time, or (iii)
changes in the industry require different coverages be obtained, Airline agrees that the minimum limits of any
insurance policy and the types of insurance policies required to be obtained by Airline may be changed
accordingly upon receipt of written notice from the City Manager; provided that Airline shall have the right to
appeal a determination of increased coverage by the City Manager to the City Council of City within ten(10)days
of receipt of notice from the City Manager. City and Airline hereby waive any rights each may have against the
other on account of any loss or damage occasioned by property damage to the Premises,its contents, or airline's
trade fixtures, equipment, personal property or inventory arising from any risk generally covered by insurance
/didV
01
Airport Use and Lease Agreement 33 1 ated my , 004
against the perils of fire, extended coverage, vandalism, malicious mischief, theft, sprinkler damage, and
earthquake sprinkler leakage. Each of the parties, on behalf of their respective insurance companies insuring
such property of either Airport or Airline against such loss, waive any right of subrogation and contribution that
it may have against the other. The foregoing waivers of subrogation shall be operative only so long as available
in California and provided further that no policy is invalidated thereby. "The Liability Policies shall name the City
of Palm Springs as an additional insured in accordance with standard ISO additional insured endorsement form
CG2010(1185) or equivalent language. The Liability Insurance shall name the City, its officers, employees and
agents as additional insured to the extent of their indemnified interest.
ARTICLE XIII
QUIET ENJOYMENT
Section 13.01 Quiet Enioyment
The City agrees that on payment of the rents, fees and other charges provided for herein and the
performance of the covenants and agreements on the part of Airline to be performed hereunder, Airline shall
peaceably have and enjoy the Premises,appurtenances,facilities, rights, licenses and privileges granted herein.
ARTICLE XIV
INSPECTION BY CITY
Section 14.01 Inspection by City
The City may enter upon the premises including the Premises that are leased exclusively, preferentially,
orjointly to Airline and others, during normal business hours and at such times as may be reasonable under the
circumstances for any purpose necessary, incidental to or connected with the performance of its obligations
hereunder or in the exercise of its governmental functions relating to the public health, safety, good conduct and
the proper management of the Airport.
ARTICLE XV
RULES AND REGULATIONS
Section 15.01 Rules and Regulations
Airport Use and Lease Agreement 34 Dated July 1, 2004
The City may adopt and enforce reasonable rules and regulations, subject to notice and opportunity to
comment,which Airline agrees to observe and obey,with respect to the use of the Airport and its appurtenances,
facilities,improvements,equipment and services;provided that such rules and regulations shall be consistent with
safety and with rules, regulations and orders of the Federal Aviation Administration and Transportation Security
Administration with respect to all operations of the Airport and, provided further, that such rules and regulations
shall not be inconsistent with the provisions of this Agreement or other agreements between the City and Airline
relating to the use of the Airport or inconsistent with the procedures prescribed or approved from time to time by
the Federal Aviation Administration and Transportation Security Administration with respect to the operation of
aircraft operated by Airline at the Airport.
In addition to the foregoing,Airline shall observe,obey,comply with and not otherwise hinder or obstruct
any and all applicable rules, regulations, laws, ordinances, statutes or orders of any governmental authority,
Federal, State or local, lawfully exercising authority over the Airport or Airline's conduct of its Air Transportation
business hereunder.
In the event City shall be subject to any fine or penalty by reason of Airline's violation of any governmental
rules, regulations or standards as now or hereafter may be promulgated or enacted, the cost of such fine or
penalty shall be borne by Airline. Furthermore,Airline agrees to indemnify, defend, and save City harmless from
any and all fines or penalties charged against City by reason of Airline's violation of any governmental rules,
regulations or standards.
City shall not be liable to Airline for any diminution or deprivation of possession,or of its rights hereunder,
on account of the exercise of any such right or authority as in this Section provided, nor shall Airline be entitled
to terminate the whole or any portion of the leasehold estate herein created, by reason of the exercise of such
right or authority, unless the exercise thereof shall so interfere with Airline's use and occupancy of the leasehold
estate herein created as to constitute a termination in whole or in part of this Agreement by operation of law in
accordance with the laws of the State of California.
ARTICLE XVI
ASSIGNMENT AND SUBLEASE
Section 16.01 Assignment and Sublease
Airline shall not assign or transfer this Agreement, the Premises or any part thereof, without the prior
written consent of the City, which consent shall not be unreasonably withheld. For purposes of this Agreement,
Airport Use and Lease Agreement 35 at d u 1, 4
an assignment shall be deemed to include the transfer to any person or group of persons acting in concert, of
more than fifty percent 50%of the present ownership and/or control of Airline,taking all transfers into account on
a cumulative basis. An assignment requiring prior written consent of the City under this Section 16.01 also
includes, but is not limited to, dual-branding, jointly-operated businesses or other,form of joint venture.
Notwithstanding the foregoing, Airline may assign this Agreement to any successor-in-interest of Airline with or
into which Airline may merge or consolidate or to any entity which may acquire substantially all of the assets of
Airline without the consent of the City; provided that said assignee complies with all of the other terms of this
Section. Airline shall not sublease all or any part of the Premises without the prior written approval of the City,
which approval shall not be unreasonably withheld.
City may withhold its consent to an assignment or sublease to a proposed assignee or sublessee, and
Airline agrees that City shall not be unreasonable for doing so, if all of the following criteria are not met: (a) the
proposed assignee's or sublessee's general financial condition, including liquidity and net worth, verified by
audited financial statements prepared by a certified public accountant in conformity with generally accepted
accounting principles, is equal to or greater than that of Airline; (b)the proposed assignee has a demonstrated
business capability equal to or greater than that of Airline in operating an Airline Transportation business;and(c)
the proposed assignee is morally and financially responsible. Prior to the effectiveness of any assignment or
subletting, regardless of whether the consent of the City is required, the assignee or sublessee shall assume all
of the obligations of Airline hereunder, in writing in a form satisfactory to the City. Said assignment or sublease
shall be subject to all of the terms and conditions of this Agreement.
City shall be under no obligation to consider a request for City's consent to an assignment until Airline
shall have submitted in writing to City a request for City's consent to such assignment or subletting together with
audited financial statements of Airline and the proposed assignee or sublessee, a history of the proposed
assignee's or sublessee's business experience and such other information as required by City to verify that the
criteria for assignment and subletting as set forth herein are met.
The consent by City to one assignment or subletting by another person or entity shall not be deemed to
be a consent to any subsequent assignment or subletting. Any assignment or subletting requiring the consent
of City made without obtaining such consent shall constitute a material breach of this Agreement, and shall, at
the option of the City, terminate this Agreement.
ARTICLE XVII
Airport Use and Lease Agreement 36 Dated July 1, 2004
SURRENDER OF POSSESSION
HOLDING OVER
Section 17.01 Surrender of Possession - Holding Over
Airline agrees to yield and deliver to the City the possession of the Premises including the Premises
leased exclusively or preferentially to Airline orjointly to Airline and others, at the termination of this Agreement
by expiration or otherwise. Such Premises shall be delivered in clean and good condition in accordance with
Airline's express obligations hereunder,except for reasonable wear and tear,fire and other casualty. Airline shall
have the right at any time during the term of this Agreement, or any renewal or extension hereof, to remove or
sell its trade fixtures and equipment situated on the Premises that were installed, or placed by it, at its expense
in, on or about the Premises pursuant to the provisions of this Agreement subject however to any valid lien that
the City may have thereon for unpaid fees or other charges. Any such removal shall be at Airline's expense and
accomplished in a good workmanlike manner. Any damage occasioned by such removal shall be repaired at
Airline's expense so that the Premises may be surrendered in a good, clean and sanitary condition.
Any holding over by Airline after the cancellation or termination of this Agreement shall not operate to
extend or renew such Agreement for any further term whatsoever.Acceptance by City of payment of rents,fees
or charges after cancellation or termination shall be deemed to be payment on account and shall not operate to
waive or modify any provision of this paragraph.
ARTICLE XVIII
TAXES
Section 18.01 Taxes
All taxes imposed on this Agreement as extended or modified (including any renewals thereof and
property interests created thereby)and on any other agreements now in effect between City and Airline or which
may hereinafter be entered into between the Airline and City (including any renewals thereof and property
interests created thereby) shall be charged to and paid by Airline.
Without limiting the generality of the foregoing, Airline shall pay all rental and/or sales taxes, if any,
assessed or levied on account of amounts payable by Airline to City hereunder.
Airline acknowledges that this Agreement may create a possessory interest subject to property taxation,
and that Airline shall be subject to payment of any real property taxes or excise taxes levied on such interest
and/or upon the fee estate,of the City. Real property taxes shall include any form of real estate taxes or
Airport Use and Lease Agreement 37 at I 1, 04,
assessments, general, special, ordinary or extraordinary and any license fee, rental tax, improvement bond or
bonds, levy, penalty, or tax composed by any authority having the power to tax as against any legal or equitable
interest of City on the Airport or on the underlying realty, as against City's right to receive rent or other income
therefrom or as against City's business of leasing the Airport whether now or hereafter enacted.
Airline shall also pay all personal property taxes and assessments levied upon Airline's personal property
located on the Premises.
If the Airline shall fail to pay said taxes, charges, or assessments within thirty (30) days before they
become delinquent, City may, at its option, pay such taxes, charges or assessments without pre-empting the
Airlines right to protest. Such amount paid by City, plus interest at the rate of ten percent(10%)per annum,shall
be considered as an additional charge payable hereunder and shall be due and payable at the next due date for
Airline Rates and Charges.
ARTICLE XIX
DEFAULT AND CANCELLATION
Section 19.01 Default by Airline
The occurrence of any one or more of the following events shall constitute a default and breach of this
Agreement by Airline: (a) the failure to pay any rental or other payment required hereunder to or on behalf of
Airport more than three(3)days after receipt of written notice from City to Airline that Airline has failed to pay rent
when due; (b)the failure to perform any of Airline's agreements or obligations hereunder(exclusive of a default
in the payment of money) where such default shall continue for a period of thirty (30) days after written notice
thereof from City to Airline which notice shall be deemed to be the statutory notice so long as such notice complies
with statutory requirements;(c)the vacation or abandonment of the Premises by Airline;(d)the making by Airline
of a general assignment for the benefit of creditors; (e)the filing by Airline of a voluntary petition in bankruptcy
or the adjudication of Airline as a bankrupt; (f) the appointment of a receiver to take possession of all or
substantially all the assets of Airline located at the Premises or of Airline's leasehold interest in the Premises; (g)
the filing by any creditor of Airline of an involuntary petition in bankruptcy which is not dismissed within sixty (60)
days. Any repetitive failure by airline to perform its agreements and obligations hereunder,though intermittently
cured, shall be deemed an incurable default. Two (2) breaches of the same covenant within a sixty (60) day
period, a notice having been given pursuant to (a) or (b) above for the first breach, or three (3) of the same or
different breaches during any 5 year period of this Agreement forwhich notices pursuant to(a)or(b)above were
Airport Use and Lease Agreement 38 t I
given for the first two(2) breaches shall conclusively be deemed to be an incurable repetitive failure by Airline to
perform its obligations hereunder.
Section 19.02 Remedies Upon Default
In the event of any such default or breach by Airline,City may at any time thereafter,without further notice
or demand, rectify or cure such default,and any sums expended by City for such purposes shall be paid by Airline
to City upon demand and as additional rental hereunder. In the event of any such default or breach by Airline,
City shall have the right(i)to continue the lease in full force and effect and enforce all of its rights and remedies
under this Agreement, including the right to recover the rental as it becomes due under this Agreement,or(ii)City
shall have the right at any time thereafter to elect to terminate the Agreement and Airline's right to possession
thereunder. Upon such termination, City shall have the right to recover from Airline:
(a) The worth at the time of award of the unpaid Airline Rates and Charges which had been earned
at the time of termination;
(b) The worth at the time of award of the amount by which the unpaid Airline Rates and Charges
which would have been earned after termination until the time of award exceeds the amount of
such Airline Rates and Charges that the Airline proves could have been reasonably avoided;
(c) Any other amount necessary to compensate the City for all the detriment proximately caused by
Airline's failure to perform its obligations under the Agreement orwhich in the ordinary course of
things would be likely to result therefrom.
The "worth at the time of award" of the amounts referred to in subparagraphs (i) and (ii) above shall be
computed by allowing interest at three percent(3%)over the prime rate then being charged by Bank of America,
N.A. but in no event greater than the maximum rate permitted by law. The "worth at the time of award" of the
amount referred to in subparagraph(iii)above shall be computed by discounting such amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time of award plus one percent(1%), but in no event greater
than ten percent (10%).
Such efforts as City may make to mitigate the damages caused by Airline's breach of this Agreement shall
not constitute a waiver of City's right to recover damages against Airline hereunder, nor shall anything herein
contained affect City's right to indemnification against Airline for any liability arising prior to the termination of this
Agreement for personal injuries or property damage, and Airline hereby agrees to indemnify and hold City
harmless from any such injuries and damages, including all attorney's fees and costs incurred by Airport in
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Airport Use and Lease Agreement 39 Dated July 1, 2004
defending any action brought against City for any recovery thereof, and in enforcing the terms and provisions of
this indemnification against Airline.
Notwithstanding any of the foregoing,the breach of this Agreement by Airline, or an abandonment of the
Premises by Airline, shall not constitute a termination of this Agreement, or of Airline's right of possession
hereunder, unless and until City elects to do so, and until such time City shall have the right to enforce all of its
rights and remedies underthis Agreement, including the right to recover Airline Rates and Charges,and all other
payments to be made by Airline hereunder,as they become due. Failure of City to terminate this Agreement shall
not prevent City from later terminating this Agreement or constitute a waiver of City's right to do so.
Section 19.03 Cancellation by City
(A) Preferential Use of Concourse Gate Positions. If,at anytime,one or more of Airline's Preferential
Use Concourse Gate Positions is underutilized as hereinafter set forth, City may cancel Airline's Preferential Use
of such underutilized Concourse Gate Position by giving Airline at least thirty (30) days prior written notice. The
one gate position guarantee set forth in Section 10.04 shall remain in effect during the term of this Agreement.
Any Concourse Gate Position shall be deemed to be underutilized if during the preceding twelve (12)
months a secondary user of Airline's Concourse Gate Position has a greater number of Fee Landings utilizing
such Preferential Use Concourse Gate Position, for the purpose of loading and unloading passengers, than
Airline.
If during the thirty(30)days notice period Airline institutes additional flights,aircraft arrivals and departures
for the purpose of loading and unloading passengers, which would exceed the number flights in place by the
secondary user, then Airline may retain Preferential Use of its Concourse Gate Position.
(B) Cessation of Use. If Airline ceases to operate for more than sixty (60) consecutive days
during the months of Novemberthrough May("peak season"),then City may cancel this Agreement and terminate
all of its obligations hereunder by giving Airline at least thirty (30) days prior written notice.
Airline is considered to have ceased operations during peak season when Airline has no aircraft
scheduled for arrival or departure at Airline's Concourse Gate Position(s), for the purpose of loading and
unloading passengers, for a period of more than sixty(60)consecutive days, unless said cessation of operations
is due to a force majeure or a labor strike.
Section 19.04 Cancellation by Airline
Airport Use and Lease Agreement 40 Dated July 1, 2004
In addition to the rights of cancellation granted heretofore in this Agreement, Airline shall have the right
to cancel this Agreement in its entirety and all rights ensuing therefrom upon the occurrence of any of the
following:
(a) The Airline provides three hundred sixty four(364) days written notice to City.
(b) The withdrawal, suspension or termination by the Federal Aviation or its successor Federal
Agency, and/or the State of California Public Utilities Commission, or its successor State Agency, of the permit
or authorization required by the law permitting or authorizing Airline to operate to and from the Airport; provided,
however, that none of the foregoing is due to any fault of Airline;
(c) The issuance of any order, rule or regulation by the Federal Aviation Administration,
Transportation Security Ad ministration, the California Public Utilities Commission,or its or their successor Federal
or State Agency of any other governmental agency having jurisdiction, or the issuance and execution of any
judicial process by any court of competent jurisdiction materially restricting for a period of at least sixty(60)days
the use of the Airport for scheduled Air Transportation; provided, however, that none of the foregoing is due to
any fault of Airline;
(d) The material restriction of City's operation of the Airport by action of the Federal Government, or
any department or agency thereof, under its wartime or emergency powers, and the continuance thereof for a
period of not less than sixty(60)days; provided, however,that without prejudice to the rights of Airline to cancel
as above provided, the parties hereto may mutually agree to a just abatement of fees and charges accordingly
as their respective rights are affected; and
(e) The material restriction of Airline's use of the Premises and facilities herein and the continuance
thereof for a period of not less than sixty(60) days by reason of any future agreement between the City and the
United States.
ARTICLE XX
DAMAGE OR DESTRUCTION
Section 20.01 Damage or Destruction of Premises
A. Partially Insured Casualty. If the Premises orthe Airport shall be partially damaged by fire or other
casualty required to be insured by City pursuant to Section 12.05, then upon City's receipt of the insurance
proceeds,City shall,except as otherwise provided in this section,promptly repair and restore the same(exclusive
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Airport Use and Lease Agreement 41 Dated July 1, 2004
of Airline's leasehold improvements, alterations or additions, trade fixtures, signs or other personal property)
substantially to the condition thereof immediately prior to said damage or destruction, limited, however, to the
extent of the insurance proceeds actually received by City therefor.
B. Substantial and Uninsured Casualty. If(a) both the Premises and the buildings constituting the
Airport shall be damaged to the extent of fifty percent(50%)or more of the cost of replacement thereof or(b)the
Premises or the buildings constituting the Airport shall be destroyed or damaged as a result of a risk not required
to be insured by City pursuant to 12.05 hereof, or(c)the Premises shall be damaged to the extent of twenty-five
percent (25%) or more of the cost of replacement thereof during the last two (2) years of the term of this
Agreement, or(d)the buildings constituting the Airport shall be damaged to the extent of fifty percent (50%) or
more of the cost of replacement thereof,whether or not the Premises shall be damaged,then in any such events,
City may elect either to repair the damages as aforesaid, or to cancel this Agreement by written notice of
cancellation given to Airline within ninety (90) days after the date of such occurrence, and thereupon this
Agreement shall cease and terminate twenty(20)days following Airline's receipt of such notice; and Airline shall
vacate and surrender the Premises to City in accordance with the terms of this Agreement. In determining the
cost of replacement of the Premises or any building or improvement, the cost of foundations and footings shall
not be included, except to the extent of the cost of repair thereto required by such damage or destruction.
C. Reconstruction. In the event of any reconstruction of the Premises or the Airport under this
Section, said reconstruction shall be performed by City's contractor. Airline, at its sole cost and expense, shall
be responsible forthe replacement of its signs,stock in trade,trade fixtures,furniture,furnishings and equipment.
Airline shall commence such installation of fixtures,equipment and merchandise promptly upon delivery to Airline
of possession of the Premises and shall diligently prosecute such installation to completion.
D. Termination. Upon any termination of this Agreement under any of the provisions of this Section,
the parties shall be released thereby without further obligation to the other party coincident with the surrender of
possession of the Premises to City, except for items which have theretofore accrued and be then unpaid and for
Airline's removal of fixtures, signs and other personal property under Section 17.01.
E. Abatement of Airline Rates and Charges. In the event of repair, reconstruction and restoration
to the Premises by City as to be paid under Sections 5.02 and 5.03 hereof shall be abated proportionately with
the degree to which Airline's use of the Premises is impaired commencing from the date of destruction and
continuing during the period of City's repair, reconstruction or restoration of the Premises. Airline shall continue
the operation reasonably practicable from the standpoint of prudent business management, and the obligation
Airport Use and Lease Agreement 42 ated July 1, 2004
of Airline to pay Landing Fees and other Airline rates and Charges shall remain in full force and effect. Airline
shall not be entitled to any compensation for damages from City for loss of the use of the whole or any part of the
Premises, the building of which the Premises are a part, or Airline's personal property or any inconvenience or
annoyance occasioned by such damage, repair, reconstruction or restoration.
F. Waiver. Airline hereby waives any statutory rights of termination which may arise by reason of
any partial or total destruction of the Premises which City is obligated to restore or may restore under any of the
provisions of this Agreement.
ARTICLE XXI
PROHIBITED USES
Section 21.01 Prohibited Uses
Airline shall not do or permit anything to be done in, on,or at the Airport which will in anyway conflict with
any law, or ordinance of any governmental agency, or with the City's rules and regulations provided for in Article
XV herein, or create a nuisance or in any way obstruct or interfere with the rights of other users of the Airport, or
damage any property or persons thereon, or endanger the health and safety of persons using the Airport.
Section 21.02 Oil. Fuel and Other Materials
Airline agrees to prevent the entry of oil, fuel or other prohibited materials that are under its control into
the drainage system of Airport or into the drainage system of any of its surrounding communities, unless such
materials are first properly treated by equipment installed with the approval of City for that purpose, and Airline
complies with recommendations made by the Environmental Protection Agency. "Drainage system(s)" shall
include among other things, the sewer system and ground water. Airline will bear all costs related to prohibited
entry of such oil, fuel or other materials into said drainage systems.
Section 21.03 Compliance with Laws
Airline shall, at its sole cost and expense, comply with all of the requirements of all municipal, state and
federal authorities now in force or which may hereafter be in force pertaining to the use of the Premises, and shall
faithfully observe in said use all municipal ordinances, including, but not limited to, the General Plan and zoning
ordinances, state and federal statutes or other governmental regulations now in force or which shall hereinafter
be in force, except that in complying with the law,Airline shall not be held responsible for any structural changes
to the terminal building. Airline's violation of law shall constitute an incurable default under this Agreement. The
judgment of any court of competent jurisdiction, or the admission of Airline in any action or proceeding against
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Airport Use and Lease Agreement 43 Dated July 1, 2004
Airline,whether City be a party thereto or not,that Airline has violated any such order or statute in said use, shall
be conclusive of that fact as between the City and Airline.
Airline shall not engage in any activity on or about the Premises that violates any Environmental Law, and
shall promptly,at Airline's sole cost and expense,take all investigatory and/or remedial action required or ordered
by any governmental agency or Environmental Law for clean-up and removal of any contamination involving any
Hazardous Material created or caused directly or indirectly by Airline. The term"Environmental Law"shall mean
any federal, state or local law, statute, ordinance or regulation pertaining to health, industrial hygiene or the
environmental conditions on, under or about the Premises, including, without limitation, (i) the Comprehensive
Environmental Response,Compensation and Liability Act of 1980("CERCLA"),42 U.S.C.Sections 9601 et seq.;
(ii) the Resource Conservation and Recovery Act of 1976 ("RCRA") 42 U.S.C. Sections 6901 et seq.; (iii)
California Health and Safety Code Sections 25100 et seq.; (iv)the Safe Drinking Water and Toxic Enforcement
Act of 1986, California Health and Safety Code Section 25249.5 et seq.; (v) California Health and Safety Code
Section 25359.7; (vi) California Health and Safety Code Section 25915; (vii)the Federal Water Pollution Control
Act, 33 U.S.C. Sections 1317 et seq.; (viii)California Water Code Section 1300 et seq.; (ix)California Civil Code
Section 3479 etseq.,as such laws are amended and the regulations and administrative codes applicable thereto.
The term"Hazardous Material"includes,without limitation,any material or substance which is(i)defined or listed
as a"hazardous waste", "extremely hazardous waste", "restrictive hazardous waste"or"hazardous substance"
or considered a waste, condition of pollution or nuisance under the Environmental Laws; (ii) petroleum or a
petroleum product of fraction thereof; (iii) asbestos; and/or (iv) substances known by the State of California to
cause cancer and/or reproductive toxicity. It is the intent of the parties hereto to construe the terms"Hazardous
Materials"and "Environmental Laws" in their broadest sense. Airline shall provide all notices required pursuant
to the Safe Drinking Water and Toxic Enforcement Act of 1986, California Health and Safety Code Section 25249
et seq. Airline shall provide prompt written notice to City of all notices of violation of the Environmental Laws
received by Airline.
ARTICLE XXII
IMPROVEMENTS
Section 22.01 Improvements by Airline
Airline may, at it expense and subject to the provisions of Section 22.02 hereof, design, construct and
install in Airline's Exclusive Use Space any additional interior partitions,walls other than structural building walls,
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Airport Use and Lease Agreement 44 Dated July 1, 2004
electrical wiring, conduits, ducts, fixtures and equipment, wall and floor coverings including all special flooring,
painting and decor,counters,cabinetwork and equipment as may be required by Airline and which is not provided
by City. Airline shall have the right to install at its expense and subject to the provisions of Section 22.02 hereof,
in the conduit and ducts provided by City in the basic building structure,the wiring and other equipment necessary
for Airline's internal communications system and the further right to attach and maintain, at it expense, on the
vertical sides of the terminal building,a communications antenna. Loading bridge improvements sought by Airline
are subject to Airport approval and modifications with the expense billable to the Airline unless said modification
is completed on all bridges and airlines agree to the Capital Improvement or the Airport finds a modification to be
in the best interest of the Airport
Section 22.02 Conditions Covering Improvements and Alterations
(A) Consent Required from City. No improvements, alterations or additions including repainting,
redecorating and recarpeting shall be made in or about Airline's Existing or Future Exclusive Use Space by Airline
without first obtaining written consent of the Director of Aviation. All such improvements, structure, alterations,
additions and work shall be in full accordance with all written conditions prescribed by the Director of Aviation.
Prior to the construction of any improvements mentioned in Section 22.01 above, Airline shall submit to the
Director of Aviation for his review and approval, the plans of such improvements, including the color of all paint
and carpet. Such plans shall conform to the general architectural scheme and overall plans adopted by the City
for the Terminal Building Complex.
(B) Working Drawings. Upon approval by the Director of Aviation of Airline's plans, Airline shall
cause the construction called for by said plans to be commenced and completed with reasonable dispatch. Upon
completion of any improvement,Airline shall furnish to City, at no charge, a complete set of working drawings of
the improvement as constructed.
(C) Conformance. All improvement constructed by Airline in the Airline's Existing or Future Exclusive
Use Space including the plans and specification therefor, shall conform in all respects to the applicable statutes,
ordinances, building code, rules and regulations of the City of Palm Springs and such other governmental
authority as may have jurisdiction. City's approval given,as provided for in this Section 22.02, shall not constitute
a representation or warranty as to such conformity which shall remain Airline's responsibility. Airline, at its own
cost and expense, shall procure all permits necessary for such construction.
(D) Airline's Cost and Expense. All renovation or construction by Airline pursuant to this Section 22.02
shall be at Airline's sole cost and expense. Airline shall keep its Existing or Future Exclusive Use Space and the
Airport Use and Lease Agreement 45 Dated July 1, 2004
improvements constructed thereon free and clear of all liens and shall pay all costs for labor and material arising
out of such construction and shall hold City harmless from any liability in respect thereto. Airline shall have the
right to contest any and all liens filed against its Existing or Future Exclusive Use Space. Airline further agrees
that City shall have the right to post notices of non-responsibility as provided by Sections 3094 and 3129 of the
Civil Code of the State of California.
(E) No Structural Alteration. Airline shall make no structural alterations to the roof,walls, or floors of
any of City's permanent structures in which Airline's Existing or Future Exclusive Use Space is located without
first obtaining City's written consent. Nothing contained this Section 22.02 shall prevent Airline from making non-
structural alterations to any improvements pursuant to this Section 22.02.
Section 22.03 Ownership of Improvements
Any and all improvements,alterations,or additions erected or installed by Airline upon the Airline's existing
or future Exclusive Use Space shall become a part of the land on which they are erected and title thereto shall
thereupon vest in City upon the expiration or sooner termination of this Agreement. However,machines,baggage
conveyor equipment, trade fixtures and similar installations of the type commonly installed in and removed from
other airport terminal facilities by tenants, which are installed in or on the Premises, shall not be deemed to be
a part of the realty even though they are attached to the floors, walls or roof of the buildings or to outside
pavements so long as they can be removed without structural damage to the buildings or pavements; provided,
however, that if the removal of any such installation damages any part or parts of the buildings, pavements, or
Premises,Airline shall repair such damage and restore said damaged part or parts of said building, pavements,
or Premises to the condition in which they existed prior to the installation of said improvements.
ARTICLE XXIII
FEDERAL GRANTS AND NON-DISCRIMINATION
Section 23.01 Non-Discrimination and FAA Required Clauses
Airline, for itself, heirs, personal representatives, successors in interest, and assigns, as a part of the
consideration hereof,does hereby covenant and agree as a covenant running with the Premises that,in the event
facilities are constructed maintained,or otherwise operated on the said Premises described in this Agreement for
a purpose forwhich a Department of Transportation(DOT)program or activity is extended orfor another purpose
involving the provision ofsimilarservices or benefits,Airline shall maintain and operate such facilities and services
in compliance with all other requirements imposed pursuant to Title 49, Code of Federal ReegAgulations, DOT,
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Airport Use and Lease Agreement 46 Dated July 1, 2004
Subtitle A,Office of the Secretary, Part 26, Nondiscrimination in Federally- Assisted Programs of the Department
of Transportation-Effectuation of Title VI of the Civil Rights Act of 1964,and as said Regulations may be amended.
Airline, for itself, personal representatives, successors in interest, and assigns, as a part of the
consideration hereof, does hereby covenant and agree as a covenant running with the Premises that: (1) no
person on the grounds of race,color,or national origin shall be excluded from participation in,denied the benefits
of, or be otherwise subjected to discrimination in the use of said facilities; (2) in the construction of any
improvements on,over,or under such Premises and the furnishing or services thereon,no person on the grounds
of race, color, or national origin shall be excluded from participation in, denied the benefits of, or otherwise be
subjected to discrimination; and (3) Airline shall use the Premises in compliance with all other requirements
imposed by or pursuant to Title 49,Code of Federal Regulations,Department of Transportation,Subtitle A,Office
of the Secretary, Part 26,Nondiscrimination in Federally-Assisted Programs of the Department of Transportation-
Effectuation of Title VI of the Civil Rights Act of 1964, as said Regulations may be amended.
In the event of breach of any of the above nondiscrimination covenants, City shall have the right to
terminate the Agreement and to re-enter and repossess said Premises and the facilities thereon, and hold the
same as if an agreement had never been made or issued. This provision does not become effective until the
procedures of 49 CFR Part 26 are followed and completed including expiration of appeal rights.
Airline shall furnish its services on a fair, equal and not unjustly discriminatory basis to all users thereof
and it shall charge fair,reasonable and not unjustly discriminatory prices for each unit or service; provided Airline
may be allowed to make reasonable and nondiscriminatory discounts, rebates or other similar type of price
reductions to volume purchasers.
Noncompliance with the preceding paragraph shall constitute a material breach thereof and, in the event
of such noncompliance, City shall have the right to terminate this Agreement and the leasehold interest hereby
created without liability therefore or, at the election of City or the Untied States, either or both said Governments
shall have the right to judicially enforce such Pprovisions.
Airline agrees that it shall insert the provisions in the five preceding paragraphs in any agreement by which
Airline grants a right or privilege to any person, firm or corporation to render services to the public on the Airport.
Airline assures that it will undertake an affirmative action program as required by 14 CFR Part 152,
Subpart E,to insure that no person,on the grounds of race, creed,color, national origin, or sex be excluded from
participating in any employment activities covered in 14 CFR Part 152,Subpart E. Airline assures that no person
shall be excluded on these grounds from participating in or receiving the services or benefits of any program or
Airport Use and Lease Agreement 47 baed*Jlulv 1, 2004
activity covered by this subpart. Airline assures that it will require that its covered suborganizations provide
assurances to Airline that, similarly, they will undertake affirmative action programs and that they will require
assurances from their suborganizations to the same effort, as required by 14 CFR 152, Subpart E.
City reserves the right to further develop or improve the landing area of the Airport as it sees fit regardless
of the desires or view of Airline and without interference or hindrance.
City reserves the right, but shall not be obligated to Airline,to maintain and keep in repair the landing area
of the Airport and all publicly-owned facilities of the Airport,together with the right to direct and control all activities
of Airline in this regard.
This Agreement shall subordinate to the provisions and requirements of any existing or future agreement
between City and the United States, relative to the development, operation or maintenance of the Airport.
There is hereby reserved to City, its successors and assigns,for the use and benefit of the public, a right
of flights for the passage of aircraft in the airspace above the surface of the Airport herein. This public right of
flight shall include the right to cause in said airspace any noise inherent in the operation of any aircraft used for
navigation or flight through the said airspace or landing at, taking off from, or operation on the Airport.
Airline agrees to comply with the notification and review requirements covered in Part 77 of the Federal
Aviation Regulations in the event future construction of a building is planned for the Airport, or in the event of any
planned modifications or alterations of any present or future building or structure situated on the Airport.
Airline, by accepting this Agreement,expressly agrees for itself, its successors and assigns that it will not
erect nor permit the erection of any structure or object, nor permit the growth of any tree on the land leased
hereunder above the mean sea level elevation of 600 feet. In the event the aforesaid covenants are breached,
City reserves the right to enter upon the Premises and to remove the offending structure or object and cut the
offending tree, all of which shall be at the expense of Airline.
Airline, by accepting this Agreement,agrees for itself, its successors and assigns that it will not make use
of the Airport in any manner which might interfere with the landing and take off of aircraft from the Airport or
otherwise constitute a hazard. In the event the aforesaid covenant is breached, City reserves the right to enter
upon the Premises hereby leased and cause the abatement of such interference at the expense of Airline.
It is understood and agreed that nothing contained shall be construed to grant or authorize the granting
of an exclusive right within the meaning of Section 308a of the Federal Aviation Act of 1958 (49 U.S.C. 1349a).
This Agreement and all the provisions hereof shall be subject to whatever right the United States
Government now has or in the future may have or acquire affecting the control, operation, regulation and taking
Aaw JIMO
if r
Airport Use and Lease Agreement 48 D ted ly , 20
over of said Airport or the exclusive or nonexclusive use of the Airport by the United States during the time of war
or national emergency.
Section 23.02 Federal Grants
This Agreement shall be subordinate to the provisions of any existing and future agreements between the
City and the United States of America, its boards, agencies, or commissions, relative to the operation or
maintenance of the Airport,the execution of which has been,orwill be, required as a condition to the expenditure
of Federal funds for the development of the Airport.
ARTICLE XXIV
CONDEMNATION
Section 24.01 Condemnation
A. Total Taking. In the event the entire Premises shall be appropriated or taken under the power
of eminent domain by any public or quasi-public authority,this Agreement shall terminate and expire as of the date
of such taking, and City and Airline shall each thereupon be released from any liability thereafter accruing
hereunder.
B. Substantial Taking. In the event more than twenty percent (20%) of the square footage of the
Premises is taken under the power of eminent domain by any public or quasi-public authority, or if by reason of
any appropriation or taking, regardless of the amount so taken,the remainder of the Premises is not useable for
Air Transportation, either City or Airline shall have the right to terminate this Agreement as of the date Airline is
required to vacate a portion of the Premises, upon giving notice in writing of such election within thirty (30)days
after receipt by Airline from City of written notice that said Premises have been so appropriated or taken. City
agrees immediately after learning of any appropriation or taking to give to Airline notice in writing thereof.
C. RighttoAward. If this Agreement is terminated in either manner herein above provided,City shall
be entitled to the entire award or compensation in such proceedings. Airline's right to receive compensation or
damages for its fixtures and personal property shall not be affected in any manner hereby.
D. Restoration. If both City and Airline elect not to so terminate this Agreement, or if neither has the
right to so terminate this Agreement following any such taking,then in either such event City agrees,at City's cost
and expense,to the extent of any severance damages attributable to damages to the Premises available to City,
to as soon as reasonably possible restore the Premises on the land remaining to a complete unit of like quality
and character as existed prior to such appropriation or taking.
/W W
Airport Use and Lease Agreement 49 Dated July 1, 2004
E. Voluntary Sale:Waiver. For the purposes of this Section, a voluntary sale or conveyance in lieu
of condemnation shall be deemed an appropriation or taking under the power of eminent domain. Airline hereby
waives any statutory rights of termination which may arise by reason of any partial taking of the Premises under
the power of eminent domain.
ARTICLE XXV
MISCELLANEOUS
Section 25.01 Non-Waiver of Rights
Continued performance by either party hereto pursuant to the terms of this Agreement after a default in
any of the terms,covenants and conditions herein contained to be performed,kept or observed by the other party
hereto, shall not be deemed a waiver of any right to cancel this Agreement for any subsequent default and no
waiver of any such default shall be construed, or act as a waiver of any subsequent default.
Section 25.02 Invalidity of Clauses
The invalidity of any Article,Section, portion, paragraph,provision,or clause of this Agreement shall have
no effect upon the validity of any other part or portion hereof.
Section 25.03 Approval by the Parties
Whenever the consent or approval of the City or the Airline is called for herein,it is understood and agreed
that such approval shall be in writing and obtained in advance and shall not be unreasonably withheld or delayed.
Section 25.04 Headings
The Article and Section titles shown in this Agreement are included only as a matter of convenience and
for reference and in no way define, limit, broaden or describe the scope or intent of any provisions of this
Agreement.
Section 25.05 Remedies
The rights and remedies given to the City and Airline in this Agreement are distinct, separate and
cumulative, and no one of them,whether or not exercised by either party, shall be deemed to be in exclusion of
any of the others herein or by law or in equity provided.
Section 25.06 Governing Law
The parties hereto agree that this Agreement shall be governed and construed in accordance with the
laws of the State of California.
Section 25.07 Non-Liability ,
Airport Use and Lease Agreement 50 Dated July 1, 2004
No board member, Commissioner, director, officer, agent, consultant or employee of the City or Airline
shall be charged personally or be held liable by or to the other party under any term or provision of this
Agreement, or any amendment thereto, or because of any breach hereof, or because of its execution.
Section 25.08 Attorneys' Fees and Costs
In the event any action or suit or proceeding is brought by either party to collect the fees and charges due
or to become due hereunder or any portion thereof or to take possession of said Premises or to enforce
compliance with this Agreement for failure to observe any of the covenants of this Agreement, and such party is
the prevailing party in such action,suit or proceeding,the losing party agrees to pay such sums as the Court may
judge reasonable attorneys'fees and costs to be allowed in said suit, action or proceeding.
Section 25.09 Notices
(a) Any request,demand, authorization, direction, notice, consent or waiver provided or permitted to be
made upon,given by,or furnished to,the City orAirline shall be sufficient for every purpose hereunder if in writing
and mailed by certified or registered mail, postage prepaid and addressed as follows:
(1) if to the City, at: Palm Springs International Airport
3400 East Tahquitz Canyon Way, Suite OFC
Palm Springs, CA 92262
Attention: Director of Aviation
(2) if the Airline, at:
Attention:
The foregoing addresses may be changed by either party giving to the other party the same type of notice
described above providing a substitute address.
(b) Any such notice or other document shall be deemed to be received as of three days after the date
deposited in the mail, if mailed in accordance with subsection (a) of this Section.
Section 25.10 Termination of Prior Agreement
City and Airline agree that the Airline Use Agreement for Palm Springs International Airport as amended
("Prior Agreement"), and expiring on June 30, 2004, is terminated as of the Effective Date of this Agreement.
Section 25.11 Exhibits
All Exhibits attached to this Agreement are incorporated herein by this reference. /fdOA;/
Airport Use and Lease Agreement 51 Dated July 1, 2004
Section 25.12 Agreement Not to Grant More Favorable Terms
Subject to the other provisions of this Section 25.12, City agrees not to enter into any lease, contract or
other agreement with any otherAircraft Operator engaged in Air Transportation containing more favorable terms
than this Agreement, or to grant to such Aircraft Operator rights or privileges with respect to the Airport that are
not accorded Airline hereunder, unless the same rights,terms and privileges are concurrently made available to
Airline. Notwithstanding the foregoing, it is understood and agreed that rentals and fees charged for terminal
buildings, associated gate positions, ramp areas, and other facilities constructed in the future and not described
in this Agreement may vary from the fees and charges established herein for the premises depending upon the
capital cost and financing arrangements involved, and therefore may be more or less than the fees and charges
established herein for similar facilities.
In the event an Aircraft Operator shall use the facilities or any services of the Airport without first executing
an agreementwith City substantially identical to this Agreement,such Aircraft Operator shall pay rentals,fees and
other charges as a non-signatory Airline, and such rentals, fees and other charges as set forth in Article V, or
otherwise at rates established by the City which are not less than those applicable to Airline as provided
hereunder.
Section 25.13 Entire Agreement
This Agreement, together with all Exhibits and Appendices hereto, constitutes the entire agreement
between the parties hereto relating to the subject matter hereof and may be amended only in writing, executed
by duly authorized representatives of the party to be bound.
Section 25.14 Jurisdiction and Venue
The parties hereto agree that the State of California is the proper jurisdiction for litigation of any matters
relating to this Agreement, and service mailed to the address of airline set forth herein shall be adequate service
for such litigation. The parties further agree that Riverside County, California is the proper place for venue as to
any such litigation and Airline agrees to submit to the personal jurisdiction of such court in the event of such
litigation.
Section 25.15 No Oral Agreements
This Agreement(i)covers in full each and every agreement of every kind or nature whatsoever between
the parties hereto concerning this Agreement, (ii)supersedes, any and all previous obligations, agreements and
understandings, if any, between the parties, oral or written, and (iii) merges all preliminary negotiations and
/WP_
Airport Use and Lease Agreement 52 Dated July 1, 2004
agreements of whatsoever kind or nature herein.Airline acknowledges that no representations or warranties of
any kind or nature not specifically set forth herein have been made by City or its agents or representatives.
Airport Use and Lease Agreement 53 Dated July 1, 2004
03/26/2004 FRI 14:57 FAX 2002/002
03/26/2004 15:25 FAX 760 318 3515 __. _ •_ 10003
,
IN WITNESS WHEREOF,the parties have executed and entered into this Agreementas ofthe date first written
below.
CITY OF PAWI SPRINGS '
ATTEST: a municipal eoipetaYron
By: By:
City clerk CRY Manager
APPROV�p A O
`--r s
CitvAttomey
CONTRACTOR: Check one:_individual`PartnQn;hin_Corporation
Carpomflons roquira twa notarized sVnature5: One tram each of Ore following: A. Chairman of Board.President,or any Vice Presdent!AND D.
Secretary,Assistant secretary,Trraxmer,Muiatant Treasurer,or Cmaf Finenaied OMOOT),
13y: BY,
Signature(notarized) Signatura(notarized)
Name Name
TMIa- Title:
$tale of I stato of 1
Ooum of FSS County of Iss
Notary Signature; Notary Signature;
Notary Seal: Notary Seal:
r
Airport Use and Lease Agreement 54 Dated July 1, 2004
loo
03/28/2004 FRI 15:27 [TX/RH N0 62971 a o03
EXHIBIT E
MAINTENANCE AND OPERATIONS RESPONSIBILITIES
Area/Item Responsibility
AiA[ppA Airline
Aircraft Parking Ramp
Pavement Maintenance X
Striping X
Sweeping X
Fuel Spill Cleanup X
Airline Exclusive Use Space
Exterior Shell/Structure X
Access Control X
Airline Security Control X
Janitorial X
General Electrical/Mechanical X
Light Bulbs X
Interior Painting X
Carpeting X
Ticket Counter Shell X
Ticket Counter Inserts X
Boarding Gate Areas
Counter Shells X
Counters/Inserts X
Signage (Directional) X
Arrival and Departure Boards X
Public Address System X
Commuter Gates 9 - 11 Counter Shells X
Commuter Gates 9- 11 Counter Inserts X
A& D TV Screens X
Hold Rooms
Custodial X
Furniture X
Airport Use and Lease Agreement Dated July 1, 2004
EXHIBIT F
SUPPLEMENTAL SPACE
Airline elects to lease Supplemental Space. Said Supplemental Space Lease shall become effective
and shall run until airline elects to lease the following space:
Type Space Sq.Ft. Rate
Office Trailer Space Same as "Exclusive Use"
Sq.Ft. Rate
Upstairs Offices $25.21/Sq.Ft./Annum
Open Storage Space /Sq.Ft./Annum
Baggage Service Desk /Sq.Ft./Annum
Descriptive information about the space leased is as follows:
Airline
Dated
Airport Use and Lease Agreement Dated July 1, 2004
EXHIBIT G
PREFERENTIAL USE OF GATE POSITIONS
The assignment of Preferential Use gate positions shall be made in strict accordance with the reasonable
rules, regulations and directives adopted and promulgated by City, consistent with this Agreement.
Effective Date Preferential Use Gate Assignments:
As of the Effective Date of this Agreement, the Preferential Use gate assignments are as follows:
Gate 1: Skywest Airlines Preferential Use, Gate
Gate 2: American Eagle Airlines Preferential Use, Gate
Gate 3: Skywest Airlines Preferential Use, Gate
Gate 4: American Airlines Preferential Use, Gate
Gate 5: Continental Airlines Preferential Use, Gate
Gate 6: American Airline Preferential Use, Gate
Gate 7: Unassigned
Gate 8: American Airlines Preferential Use, Time Slot Only
Gate 9: Alaska Airlines Preferential Use, Time Slat Only
Gate 10: Alaska Airlines Preferential Use, Gate
Gate 11: Alaska Airlines Preferential Use, Gate
Gate 12: Aircraft Parking Position
Gate 13: Closed
Gate 14: Aircraft Parking Position
Gate 15: Closed
Gate 16: Aircraft Parking Position
Gate 17: Closed
Gate 18: America West Express / Mesa Airlines Preferential Use, Gate
Gate 19: American West Express / Mesa Airlines Preferential Use, Gate
The Preferential Use gate assignments set forth above are for the term of the Agreement, but subject to
the annual review and assignment provisions of this Exhibit.
Annual Review
Review of the existing Preferential Use gate assignments will be performed by the Director of Aviation
annually, each September, and based upon the scheduled flights for sale in each Signatory Airline's
reservation system for the immediately following period from October through April. Annual review of the
Preferential Use gate assignments is not intended to change an existing assignment, but rather to modify
secondary use and time slots. The Director of Aviation will notify the Airline Affairs Committee of any
change to the above as a result of such review. /���7
Airport Use and Lease Agreement Dated July 1, 2004
In the event requests for unassigned gates are greater than that available, assignments will be made
taking into consideration seat capacity, total operations, and airline seniority at the Airport. Additionally,
should any Signatory Airline with Preferential gate assignment scale back flight activity then the Director
of Aviation will have the right to modify preferential gate assignment.
Assignment of Signatory Airlines to Preferential Use Gate Positions
Subject to the Effective Date Gate Allocation and Annual Review provisions above, and to the extent
unassigned gates are available, Signatory Airlines shall be eligible for assignment of a Preferential Use
gate position(s) as follows:
1. Gate Positions 1. 2. and 3:
A. Consideration shall first be given to Signatory Airlines operating aircraft with 70 seats or less.
B. Preferential use of one gate position for each Signatory Airline.
C. If a Signatory Airline will have for sale in a reservation system regularly scheduled daily
operations (minimum 5 times per week)which requires simultaneous use of at least two gate
positions, at least three times daily, then such airline shall have the preferential use of a second
gate position, at all times, for as long as the simultaneous use of two gates, ten times per day,
is required.
D. The Preferential Use assignment to Signatory Airlines operating aircraft with more than 70 seats
to these gate positions shall be at the discretion of the Director of Aviation.
2. Gate Positions 4 through 11, 18 and 19:
A. Consideration shall first be given to Signatory Airlines operating aircraft with 50 seats or more.
B. Preferential use of one gate position for each Signatory Airline.
C. If a Signatory Airline will have for sale in a reservation system regularly scheduled daily
operations (minimum 5 days per week) which requires simultaneous use of at least two gate
positions, at least three times daily, then such airline shall have the preferential use of a second
gate position, at all times,for as long as the simultaneous use of two gates,three times per day,
is required.
D. If a Signatory Airline will have for sale in a reservation system regularly scheduled daily flights
which require simultaneous use of at least two gate positions, but less than three times per day,
then such airline shall have the preferential use of a second gate position during the Active
Scheduled Time Frame for as long as the simultaneous use of two gate positions is required.
Airport Use and Lease Agreement I#A& Dated July 1, 2004
The "Active Scheduled Time Frame" is hereby defined as the period from 15 minutes prior to
the scheduled arrival time plus 45 minutes thereafter, and the period from 45 minutes prior to
the schedule departure time plus 15 minutes thereafter. Such period of time does not have to
be continuous.
E. If a Signatory Airline has qualified for two preferential gate positions, pursuant to subparagraph
(d). above, and will have for sale in a reservation system regularly scheduled daily flights which
require simultaneous use of three gate positions, then such airline shall have the preferential
use of a third gate position during the Active Scheduled Time Frame for as long as the
simultaneous use of three gate positions is required.
Assignment of Other Aircraft Operators a Secondary User at Preferential Use Gates
The City retains the right to assign other Aircraft Operators to use one or more of a Signatory Airline's
Preferential Use gate position(s) (or component thereof) on a Secondary User basis. A Secondary User
is hereby defined as an Aircraft Operator assigned by the Cityto a Signatory Airline's Preferential Use gate
position with the understanding that its availability is subject to the scheduled and non-scheduled
requirements of the Signatory Airline.
In executing this right; the Director of Aviation:
1. May request a Signatory Airline to temporarily remove an aircraft parked at its Preferential Use gate
position and City shall provide the Signatory Airline a reasonably convenient aircraft parking position
at the Terminal Building Complex, and there shall be no fee to a Signatory Airline for use of such
aircraft parking position. Signatory Airline is required to maintain the necessary staff and equipment
at the Airport to relocate such aircraft when so directed.
2. In making such assignment, the Director of Aviation shall take into consideration:
A. the Secondary User's schedule and aircraft type, and the availability of unoccupied gates.
B. the arrival and departure schedule of the Secondary User's incoming aircraft and the departure
schedule of the Signatory Airline's aircraft occupying the gate.
C. the availability of other aircraft parking positions at the Terminal Building Complex for use by the
effected Signatory Airline.
3. Shall not assign an Secondary User to a Signatory Airline's Preferential Use gate position if doing so
would fall within the Active Scheduled Time Frame of Signatory Airlines' flight.
Airport Use and Lease Agreement /946%
Dated July 1, 2004
If such request impacts a Signatory Airline,the Secondary User benefiting from the relocation of an aircraft
shall pay the Signatory Airline a reasonable fee as reimbursement for the cost of relocating its' aircraft
to/from such Preferential Use gate position. Such fee shall be established for all Aircraft operators and
reviewed annually between the Airline-Airport Affairs Committee and the Director of Aviation.
Airport Use and Lease Agreement Dated July 1, 2004
FROM :MK&P—PS FAX NO. :7603228979 May. 11 2004 10:08RM P2
LAW OFFICES OF
MIDDLEBROOK, KAISER & POPKA
IiRGO C,MIOULGpRD01C 001 EASTTAHC1UITZCANYDN WAY,St,.ion
MICHAPI.R.KAIS[A PALM BPRINOS,CA6IFORNIA 02262 SAN 6FRNAROINO DFF'ICE
DENNIS o,PDPItA 0nn N.ARRDwHF.,AU AVE. sTF,zoo
IEFIY M.Y488 Tehghpnll: p60)022-0006 SAN SEHNARDIND, OA 0,402
OFNNIS R 9TOUT Finail, pad)WP4970 _
PAHE`IV E.I.15NNF.9BACI1 E-Mail,nwnaaan(Nmkp-0aw anm
NANCY MFNZIES VAFS2F,N 1'alo,Iuho: (00P)n00-57LI
PHANNONNLmnAFR naoolmlla: (90A 09tl'mq
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May 11, 2004
E^Ii l 4 �
Yifl.1 o esinAk
.C949) 223.1180 &c (760) 23-8207
David Aleshire, Esq.
Aleshire &Wynder, I.LP
1.8881 Von Kar mun. Avenue, Suite 400
Thine, Ca 92612
Dear Mr. Aleshire:
Upon.further review of the legislative draft Of the proposed amendment to the Palm Springs
Municipal Code relating to taxi cab signs, l noticed that paragraph,2 provides that the "advertising
matter shall be displayed only by one (1) of the following methods:". The program that has been set
tip by the Coachella Valley Taxi Owners Association calls for the display of advertisement on
BOTH the near window and the roof, Advertisement in both matmers is desired by the advertisers
because it makes the advertisement visible from all three directions. There does not appear to be
any detriment caused by permitting advertisement on both the rear window and the root.'and we
would ask that YOU I.00OnSider this section of the legislative draft and amend it so drat it peunits
advertising both on the roof and the.rear window of any Single cab,
Yours very truly,
MIDDLEBROOK, .KAISER & POPKA
41/C(I'IAZEL R. KAISER
M-RK&t
cc: Sergio Santo
Coachella Vallay Taxi Owners Association
r
FROh,P :MK&P—PS FRX NO. :7603228979 May. 10 2004 02:01PM P2
LAW OFFICES OF
MIDDLEBROOK, RAISER & POPKA
001 FASTTAWONITZCANYCN WAY,SIe 101
OREO c MIPOLFSRCOI( PALM sPPINoS,CAI,IFORNIA So= SAN EERNANDINo oPFIOE
=MIOHAFLn KAISEn 600N ARRCWIIEAO AVE.,BTE.I@0
142F 0.PC)PNA T.Inhoe. 760 arz-0e0a sAN FFRNARPINO, cn ezna2
JEFF M Y05E I
PFNNIS R.STOUT F•celmilr(00)a2&a0 b
DARFN F�HFNOFGGAOFl E-Mall nve00rsenC9mFP-IBW,Cem
Telephone: (009)saa-5761
NANCV MFN7.IFA VAFeeF�N Feoomlle: E90B)506-];I80
BRE9'A, N
91anNNCN N SI SUSJEER
May 1.0, 2004
Via Foes.inaile
(949)(949) 223.1180 & (760) 323-8207
David Aleshire, Tsy,
Aleshire& Wynder, LUI
18881 Von, Karman Avenue, Suite 400
Irvine, Ca, 9261.2
Dear Mr, Aleshire:
Thank you for forwarding a copy of the legislative draft of the proposed amendment to the
Palm Springs Municipal Code relating to taxi cab signs. Mr. Santo has indicated to me that the size
of the ad carrier as indicated in the recommendations to the City of Patin Springs is apparently in
en-or. The actual size is 2 inches larger in length, width and height. Accordingly, we would ask that
Paragraph 2, A he changed to indicated:
" 1le ad CWTier shall not exceed 56 inches in length, 1,9 inches in width, and 17 inches in
height extending from the.roof of the taxi."
Thank you for your consideration,in this matter.
Yours very truly,
MIDDLEHROOK, KAISER & POPKA
MICHAEL R. KAISER
M12 fC/kt
RESOLUTION NO_
OF THE CITY COUNCIL OF THE CITY PALM SPRINGS,
CALIFORNIA, APPROVING A TEN YEAR AIRPORT USE
AND LEASE AGREEMENT, STANDARD FORM 04-001A,
FOR USE WITH ALL AIRLINES SEEKING SIGNATORY
STATUS AT PALM SPRINGS INTERNATIONAL AIRPORT
AND AUTHORIZING THE DIRECTOR OF AVIATION TO
APPROVE AND EXECUTE ALL SUCH AGREEMENTS
SUBMITTED BY AIRLINES DURING THE TERM OF THE
AGREEMENT.
WHEREAS, the City s current Standard Form Airport Use and Lease Agreement will expire
on June 30, 2004; and
WHEREAS,the airport, City and airlines have all negotiated in good faith to reach agreement
on a new ten year Airport Use and Lease Agreement; and
WHEREAS, the Airport Commission recommends City Council approval of Standard Form
004-001A Airport Use and Lease Agreement,
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Palm Springs as
follows:
Section 1. That the City Council does hereby approve Standard Form 04-001A Airport
Use and Lease Agreement to be effective July 1, 2004 for use with all airlines
seeking signatory status at Palm Springs International Airport; and
Section 2. That the Director of Aviation is hereby authorized to execute on behalf of the
City said Standard Form 04-001A Airport Use and Lease Agreements
submitted by airtines seeking signatory status at the airport during the tern of
the agreement.
ADOPTED this day of , 2004.
AYES:
NOES:
ABSENT:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
By
City Clerk City Manager
REVIEWED & APPROVED AS TO FORM