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Redlands Municipal Airport Business Plan

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Redlands Municipal Airport Business Plan Acknowledgements It is with appreciation for the sponsorship and oversight of this study that the Mayor and the following members of City Council and City Staff are acknowledged: Mayor: Paul W. Foster Mayor Pro Tem: Jon Harrison Council Member: Pat Gilbreath Council Member: Paul Barich Council Member: John E. James City Manager: N. Enrique Martinez Quality of Life Director Chris Boatman Redlands Municipal Airport Business Plan Final Technical Report Prepared for: City of Redlands, California Prepared by: R.A. Wiedemann & Associates, Inc. P.O. Box 621 ! Georgetown, KY 40324 ! (502) 535-6570 ! FAX (502) 535-5314 TABLE OF CONTENTS EXECUTIVE SUMMAY ......................................................................................................... E-1 SECTION 1: INTRODUCTION 1.1 Understanding & Key Issues ............................................................................... 1-1 1.2 Desired End Products ........................................................................................... 1-3 1.3 Report Outline ...................................................................................................... 1-4 SECTION 2: AIRPORT MISSION AND MANAGEMENT STRUCTURE 2.1 Current Airport Mission ....................................................................................... 2-1 2.2 Airport Accounting and Business Practices ......................................................... 2-2 2.3 Current Airport Management Structure ............................................................... 2-4 2.4 Summary and Preliminary Observations ............................................................. 2-8 SECTION 3: EXISTING AIRPORT CHARACTERISTICS 3.1 Airport Location................................................................................................... 3-1 3.2 Demographic Characteristics ............................................................................... 3-2 3.3 Airport Facilities .................................................................................................. 3-3 3.4 Competitive Market Assessment ......................................................................... 3-8 SECTION 4: BASELINE FINANCIAL PROJECTIONS 4.1 Historical Revenues ............................................................................................. 4-1 4.2 Historical Expenses .............................................................................................. 4-4 4.3 Baseline Forecast of Operating Revenues and Expenses .................................... 4-7 4.4 Non-Operating Expenses ................................................................................... 4-10 SECTION 5: BUSINESS PLAN ALTERNATIVES 5.1 Airport Branding .................................................................................................. 5-1 5.2 Flight School/University or College Partnering .................................................. 5-4 5.3 Hangar Development ........................................................................................... 5-5 5.4 Airport Events ..................................................................................................... 5-7 5.5 Attraction SASOs and Aviation Support Businesses .......................................... 5-9 5.6 Increased Business Aviation Use ...................................................................... 5-11 5.7 Non-Aviation Land Development..................................................................... 5-12 5.8 Rates and Charges Adjustments ........................................................................ 5-14 5.9 Fuel Sales by City ............................................................................................. 5-15 5.10 Summary Impact of Revenue Enhancement Strategies on Potential Demand . 5-16 SECTION 6: FINDINGS AND RECOMMENDATIONS 6.1 Recommended Administrative and Policy Actions ............................................. 6-1 6.2 Revenue Enhancement Recommendations ........................................................ 6-11 6.3 Impact on Revenues and Expenses ................................................................... 6-23 6.4 Summary Recommendations ............................................................................. 6-28 TABLE OF CONTENTS (Cont.) SECTION 7: AIRPORT COMMUNITY VALUE 7.1 Economic Activity Generated By REI ................................................................. 7-1 7.2 Existing Value of Airport Property and Facilities ............................................... 7-3 7.3 Summary of Airport Community Value .............................................................. 7-6 LIST OF FIGURES Figure 2-1 – Airport Organization Chart ......................................................................... 2-5 Figure 3-1 – Airport Location and Service Area ............................................................. 3-1 Figure 3-2 – Existing Airport Layout .............................................................................. 3-3 Figure 3-3 – Landside Buildings...................................................................................... 3-6 Figure 4-1 – Historical Operating Revenues by Category ............................................... 4-3 Figure 4-2 – Comparison of Historical Operating Revenue Category Splits .................. 4-4 Figure 4-3 – Historical Operating Expenses by Category. .............................................. 4-6 Figure 4-4 – Percentage Shifts in Operating Expenses .................................................... 4-6 Figure 5-1 – Potential Solar Farm Locations ................................................................. 5-14 Figure 5-3 – Impact of Revenue Enhancement Strategies on Potential GA Demand ... 5-16 LIST OF TABLES Table 3-1 – Historical Population Trends ........................................................................ 3-2 Table 3-2 – Historical Per Capita Personal Income Trends ............................................. 3-2 Table 3-3 – Redlands Municipal Airport Runway Data .................................................. 3-4 Table 3-4 – REI Landside Building Inventory ................................................................ 3-6 Table 3-5 – Facility Comparison ................................................................................... 3-11 Table 3-6 – Services Comparison .................................................................................. 3-12 Table 3-7 – Rates and Charges Comparison .................................................................. 3-13 Table 4-1 – Historical Revenues ...................................................................................... 4-2 Table 4-2 – Rental Income: 2011-2015 ........................................................................... 4-3 Table 4-3 – Historical Expenses ...................................................................................... 4-5 Table 4-4 – Comparison of Operating Revenues & Expenses ........................................ 4-6 Table 4-5 – Baseline Forecast of Operating Revenues and Expenses ............................. 4-9 Table 4-6 – Grants and Capital Spending ...................................................................... 4-10 Table 4-7 – Airport Historical Debt Payments .............................................................. 4-10 Table 4-8 – Baseline Net Deficit ................................................................................... 4-11 Table 4-9 – Airport Net Revenues at Lower Debt Payment .......................................... 4-11 Table 4-10 – Redlands Municipal Airport ACIP ........................................................... 4-12 Table 5-1 – County Hangar Development Model ............................................................ 5-7 Table 5-2 – Private Development of Hangars .................................................................. 5-7 Table 5-3 – Impact of Revenue Enhancement Strategies on Potential GA Demand ..... 5-16 Table 6-1 – Conventional Hangar Breakeven with FAA Grant .................................... 6-15 Table 6-2 – Ten Unit T-Hangar Breakeven with FAA Grant ........................................ 6-15 Table 6-3 – Private Development of Hangars ................................................................ 6-16 Table 6-4 – Recommended Plan .................................................................................... 6-24 Table 6-5 – Recommended Plan Net Revenue (Deficit) ............................................... 6-25 Table 6-6 – Recommended Plan Non-Operating Expenses ........................................... 6-26 Table 7-1 – Direct and Induced Economic Impacts: Redlands Municipal Airport ......... 7-3 Table 7-2 – Redlands Municipal Airport Replacement Value ......................................... 7-4 Table 7-3 – Depreciated/Existing Airport Value ............................................................. 7-5 APPENDIX Appendix 2A – City Council Airport Responsibilities ................................................. 2A-1 Appendix 3A – SWOT Analysis................................................................................... 3A-1 Appendix 3B – Airport Lease Analysis .........................................................................3B-1 Appendix 3C – Survey of Airport Users & Businesses .................................................3C-1 Appendix 4A – Trend Lines vs. Baselines .................................................................... 4A-1 Redlands Municipal Airport Business Plan May 2016 EXECUTIVE SUMMARY Redlands
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