City of Nampa Board of Appraisers Meeting Agenda Wednesday, October 7, 2020, 10:00 a.m. City of Nampa Development Services Center (500 12th Avenue South, Basement Large Conference Room)
Call to Order Roll Call of Board Members Proposed Amendments to Agenda Staff Communications 1) Review of Utility Billing Pool Adjustment Policy and Procedures – Jacob Allen, Public Works Business Manager 2) Review of Utility Billing Special Sewer Rate Policy and Procedures – Jacob Allen, Public Works Business Manager 3) Underlying Irrigation Districts Summary of Landowner Requests for Exclusion of Water Rights – Daniel Badger, P.E., City Engineer 4) Nampa Municipal Irrigation System Summary of Landowner Irrigation Tax Exclusion and/or No Benefit Rate Requests – Daniel Badger, P.E., City Engineer New Business 1) Action Item: Authorize Admiral Beverage Corporation Purchase of Wastewater Treatment Capacity – Nate Runyan, P.E., Deputy Public Works Director (Water) 2) Action Item: Nampa Municipal Airport Cost of Service Study and Recommended Rates and Fees Increase – Jeff Barnes, P.E., Deputy Public Works Director (Airport) and Jacob Allen, Public Works Business Manager Adjourn
Page 1 of 60 Staff Communications #1
City of Nampa
PUBLIC WORKS ADMINISTRATION OFFICE (208) 468-5420 500 12TH AVENUE SOUTH NAMPA, IDAHO 83651 MEMO
Date: October 7, 2020 To: City of Nampa Board of Appraisers Copy: Tom Points, P.E., Public Works Director From: Jacob Allen, Public Works Business Manager Re: Utility Billing Pool Adjustment Policy
The City currently has a Pool Adjustment Policy (Exhibit A) in place which adjusts sewer bills one time per year for filling customer swimming pools. Customers are charged for the domestic water used to fill the pool. However, the water used is not running into the sewer system and the water consumption on the sewer bill will be higher than actual usage. Pool water evaporates over time, or if drained goes into one’s yard not the sewer system. The policy is designed to credit the customer for the sewer portion of that water usage equivalent to the amount put into the pool. If a customer wishes to refill their pool within that same year additional credit will not be given.
The current process only requires Nampa utility customers to call the City’s Utility Billing to request the pool adjustment. Utility Billing will obtain the size of the pool, in gallons, and credit the amount of water used within the same billing cycle. Again, only the sewer portion of the bill is adjusted.
It has come to staff’s attention that some customer requests have not been processed correctly. In an effort to improve customer service and create stronger internal controls, staff makes the following recommendations to the Pool Adjustment Policy:
A. Currently, Nampa customers only have to call Utility Billing to request the pool adjustment. Recommendation is made that the customer be required to fill out an online pool adjustment form via the City’s website. Implementing this change will, (1) create a procedural paper trail for needed action, history and auditing, (2) notify appropriate staff to ensure the request is accounted for and handled in a timely and efficient manner, and (3) provide the approver documentation of the customer request, staff action, and ensure the sewer credit is correctly calculated and applied to the customer’s utility bill.
Page 2 of 60 B. The current policy does not include customer follow-up. Staff recommends, (1) the customer receive an email acknowledging their request. This communication should also provide information as to the sewer credit adjustment that will be applied to their account, and (2) create a separate line item for the sewer credit adjustment on the utility bill so it can be easily identified by the customer. a. Also, for additional customer service, staff recommends a direct link be added under the City’s “Utilities” webpage regarding the availability of the pool credit.
C. Identify and implement audit controls to verify pool existence and size. Staff recommends residential visits, GIS mapping, and/or comparison of water usage.
Page 3 of 60 Exhibit A City of Nampa Utility Billing 401 3rd St. S Nampa, ID 83651 (208) 468-5711 Procedure Subject Pool Adjustment Page 1 of 7 Effective Date 02/10/2020
The City of Nampa will adjust off a portion of the estimated cost of a customer filling a pool once every calendar year (roughly the cost of the sewer charge for the amount of water used, as it will not be actually going down City sewers). The customer must call in and request the adjustment, which will be made on the bill covering usage during the time when the customer filled said pool. If, for any reason, a customer must re-fill their pool during the same calendar year, they will not be granted additional adjustments.
Page 4 of 60 City of Nampa Utility Billing 401 3rd St. S Nampa, ID 83651 (208) 468-5711 Procedure Subject Pool Adjustment Page 2 of 7 Effective Date 02/10/2020
Customer must provide us with volume of pool (in gallons).
Divide number of gallons pool holds by 7.5 cubic ft. This is the amount of consumption that needs to be adjusted off the sewer portion.
To do this, select the adjustment batch for the day. Select new to enter a new adjustment.
Page 5 of 60 City of Nampa Utility Billing 401 3rd St. S Nampa, ID 83651 (208) 468-5711 Procedure Subject Pool Adjustment Page 3 of 7 Effective Date 02/10/2020
Enter the customer’s account number.
Tran Type should be Billing because you are entering an adjustment to a billing.
Adjustment Type is PA for Pool Adjustment.
Make sure to select Consumption for Cons Adj Type and put your initials after the description.
Once all of this is entered, select Next.
Page 6 of 60 City of Nampa Utility Billing 401 3rd St. S Nampa, ID 83651 (208) 468-5711 Procedure Subject Pool Adjustment Page 4 of 7 Effective Date 02/10/2020
Select the billing that needs to be adjusted, the period in which the pool was filled.
Select Next.
Page 7 of 60 City of Nampa Utility Billing 401 3rd St. S Nampa, ID 83651 (208) 468-5711 Procedure Subject Pool Adjustment Page 5 of 7 Effective Date 02/10/2020
Verify you have the correct consumption selected.
In the cons Adjustment box enter in what change you want to make to the consumption. For example, this customer filled a 3,000 gallon pool. To calculate what adjustment needs to be done you would take the 3,000 gallons used and divide it by 7.5. The customer used 400 CF to fill their pool. In the Cons Adjustment box enter –400 to adj the consumption.
Select Next.
Page 8 of 60 City of Nampa Utility Billing 401 3rd St. S Nampa, ID 83651 (208) 468-5711 Procedure Subject Pool Adjustment Page 6 of 7 Effective Date 02/10/2020
You should get a pop up asking if you want the system to calculate the adjustment. Select Yes.
Click on Next.
Page 9 of 60 City of Nampa Utility Billing 401 3rd St. S Nampa, ID 83651 (208) 468-5711 Procedure Subject Pool Adjustment Page 7 of 7 Effective Date 02/10/2020
The screen will now show the adjustment amounts for water and sewer.
Please note, the pool adjustments are only on the sewer portion since the water was used to fill the pool. You will need to select the water adjustment amount and change it to 0.
Once you have changed the water adjustment amount to 0.00 select Finish.
Submit your back up documentation (pink form) to the committer.
Page 10 of 60 Staff Communication #2
City of Nampa
PUBLIC WORKS ADMINISTRATION OFFICE (208) 468-5420 500 12TH AVENUE SOUTH NAMPA, IDAHO 83651 MEMO
Date: October 7, 2020 To: City of Nampa Board of Appraisers Copy: Tom Points, P.E., Public Works Director From: Jacob Allen, Public Works Business Manager Re: Utility Billing Special Sewer Rate Policy
The City’s Special Sewer Rate Policy (SESP) (Exhibit A) is designed for Nampa customers that do not have access to irrigation services which ultimately forces the use of domestic water. In doing so their water usage in summer months is higher than usual and portions of consumption is not flowing into the wastewater system as does most used domestic water. Therefore, the City has created the SESP to credit customers the incurred sewer charges of which has not been used.
Customers must request the special sewer rate. Engineering staff will then determine whether irrigation services are available for the requested property. If irrigation services are available, but the customer does not wish to connect to the system, the rate is not available to said customer. Irrigation services must be unavailable in order for the Nampa customer to receive the special sewer rate.
Upon approval for the special sewer rate, Utility Billing will credit a portion of the customer sewer bill for three billing cycles, or six months, during the irrigation season. During this time, the SESP states the three-cycle average during winter months will be used to determine the amount of sewer usage. There is an internal verification process currently in place to ensure credits are not being given when not necessary. During each billing cycle Utility Billing examines the current usage and compares it to the winter month average used for billing; if the current usage is less than the winter month average, no credit is given.
Some Nampa customers do not have the ability to use irrigation services and are dependent upon domestic water to keep landscaping alive during irrigation season. As that water goes into the ground, and not into the established sewer system, it is only fair that customers are not charged for those sewer charges, based off the meter reads for domestic water consumption. Upon review of the SESP and procedures, staff does not see any issues and has no recommended changes at this time.
Page 11 of 60 Exhibit A
Customers that do not have irrigation water available are given a “special sewer rate” for 3 billing cycles per year. The water has to be “unavailable”. If the water is available and the customer chooses not to pay the fees and be “hooked-up” they do not receive a special sewer rate.
Starting in July with cycle 1 - before it is billed - using the cards in the black “SESP” box to determine if a rate is to be given or not.
Page 12 of 60 To get the rate for the SESP you will need to get a winter average for the customer. In Springbrook go to the customer history tab add the consumption usage for the 3 winter bills together, then average.
If the winter average usage is higher than the current amount to be billed, you will not give them a rate. Mark on the individual customer cards “NO RATE @ (the date you are doing the calculation)."
If the winter average is less than the current amount to be billed, you will give them an SESP rate. Take the usage amount that you got from figuring the winter average and look up the consumption amount on the water/sewer chart. This is the dollar amount they will be charged for the next 3 billings.
Start date = The following day of last read date.
THEM. Page 13 of 60 You will find the general billing dates in the black SESP box.
Look at each account to make sure that the dates are correct.
Go in to Springbrook – go into each account – go to the Service Rates tab. Close the current sewer rate one day before the SESP rate is to start. Open the SESP rate and enter the amount to be billed
The close date will have to be done once the reading date of the 3rd time billed takes place.
Page 14 of 60 Make sure that you re-enter the correct sewer code. If it was a SE2 – re-enter SE2.
Mark each customer card with the cubic feet used for the average, the amount of the change and the date.
This will be done for all 6 cycles through July & August.
Page 15 of 60 Staff Communication #3
Underlying Irrigation Districts Summary of Landowner Requests for Exclusion of Water Rights Board of Appraisers October 7, 2020
Boise-Kuna Irrigation District
No requests were received from the Boise-Kuna Irrigation District since last report of June 24, 2020.
Nampa Meridian Irrigation District
No requests were received from the Nampa Meridian Irrigation District since last report of June 24, 2020.
Pioneer Irrigation District
No requests were received from the Pioneer Irrigation District since last report of June 24, 2020.
Page 16 of 60 Staff Communication #4
Nampa Municipal Irrigation System Summary of Landowner Irrigation Tax Exclusion and/or No Benefit Rate Requests Board of Appraisers October 7, 2020
No exclusion, reduced rate (No Benefit), or appeals have been received from Nampa irrigation customers since the last Board of Appraisers meeting of June 24, 2020.
Page 17 of 60 New Business #1
Admiral Beverage Corporation Agreement for the Purchase of Wastewater Treatment Capacity
• Admiral Beverage Corporation (Admiral) would like to utilize the City of Nampa Wastewater Industrial Incentives Policy (Policy) (Exhibit A) and enter into a capacity purchase agreement
• The Policy has two standard options: o 10-year term at prime rate plus 100 basis points (4.25%)* o 5-year term at prime rate plus 50 basis points (3.75%)* (*Based on WSJ Prime Rate 3.25%, September 2020)
• On August 7, 2020, Admiral submitted a formal petition (Exhibit B) to purchase wastewater capacity with a five-year amortized payment plan, per Section 6.C of the Policy
• Admiral needs additional capacity to support business growth. The capacity is valued at $230,221.97 (October 1, 2019, hookup fee schedule), including the following constituents: o Monthly average flow by 30,000 gallons o Total Suspended Solids of 85 lbs./day o Total Phosphorous of 6 lbs./day o Connection fee value of leased capacity • Staff is seeking the Board of Appraiser’s recommendation on interest rate for the 5-year payment plan (Exhibit C): o 3.75% annual interest rate, total payments of $252,837.85 o 1.875% annual interest rate, total payments of $241,361.90 o 0% annual interest rate, total payments of $230,221.97 • One capacity purchase agreement has been previously approved by City Council in November 2017: o Mother Earth Brew Co, LLC, for $92,865.68 of wastewater capacity, 10-year payment plan at 2.625%, total payments of $105,687.90
REQUEST: Board of Appraisers decision and recommendation to City Council for Admiral Beverage Corporation’s Purchase of Wastewater Treatment Capacity in the amount of $230,221.97 with terms and conditions as follows: A) 5-year payment plan at 3.75%, monthly payments of $4,213.96, totaling $252,837.85, or B) 5-year payment plan at 1.875%, monthly payments of $4,022.70, totaling $241,361.90, or C) 5-year payment plan at 0.0%, monthly payments of $3,837.03, totaling $230,221.97.
Page 18 of 60 Exhibit A
1 City of Nampa Wastewater Industrial Incentives Policy 2 3 Section 1: Policy Purpose and the Relationship of Wastewater Capacity Reservation and Economic 4 Development Policy. 5 Section 2: Introduction. 6 Section 3: Goals. 7 Section 4: Definitions. (Reserved) 8 Section 5: Discharge and Pretreatment Requirements. 9 Section 6: Incentives. 10 Section 7: Capacity Optimization Fee. 11 Section 8: Economic Impact Benefit Requirements for Industrial Customer Incentives. (Reserved) 12 Section 9: Wastewater Industrial Incentive Policy Petition Form 13 14 Section 1: Policy Purpose and the Relationship of Wastewater Capacity Reservation and Economic 15 Development Policy. 16 There is a direct relationship between infrastructure and economic development. Municipalities 17 that properly construct, finance, and operate water and wastewater systems, roads, bridges, and other 18 transportation facilities are better able to serve the needs of the community on a sustainable basis. For 19 industrial customers, the predictability of quality, quantity and cost of essential infrastructure services 20 that are directly purchased through user fees is a key business consideration. Infrastructure cost of 21 service, along with community attributes, quality of life, labor force, and other local conditions are 22 factors in corporate decisions to locate or expand operations in a community. 23 The City of Nampa’s wastewater system provides an indirect discharging benefit to industrial 24 customers that is in most cases more cost advantageous than directly discharging wastewater according 25 to U.S. Clean Water Act requirements1. The effect of indirect discharging is that the City, rather than an 26 individual industry, obtains a permit to discharge treated wastewater into the waters of the United 27 States. There is an economy of scale that cannot easily be replicated by a single industry. At the same 28 time, the value of the indirect discharge benefit to industry depends upon the effective operation and 29 management, including financial management, of the wastewater system. The City of Nampa’s 30 economic development plan and the implementation of that plan -- to the extent that the City’s
1 33 U.S.C. §1251 et seq. (1972)
Page 19 of 60 1 economic development goals include the attraction, retention, and expansion of its industrial base -- 2 depends upon a sustainable wastewater treatment system. 3 4 Section 2: Introduction. 5 It is the policy of the City of Nampa that all customers pay their fair share of the cost of using the 6 Nampa Wastewater System. That fair share includes the cost of reserving capacity to discharge 7 wastewater to be treated. Each new customer or existing customer seeking greater discharge capacity 8 is required to pay the proportionate share of the cost of capitalizing the wastewater system as available 9 capacity to discharge is purchased. The unit cost of capacity to discharge is charged to all customers 10 proportionately based on the wastewater discharge equivalent of a residential dwelling unit, commonly 11 known as an equivalent residential unit (ERU). The cost of establishing wastewater discharge capacity is 12 calculated for each customer by converting the volume and strength of wastewater discharge into the 13 number of ERU units that need to be provided to each customer. This ensures that either the 14 wastewater system capacity to serve new customers is available for new customers, or the financial 15 resources needed to capitalize expansion of the system to serve new customers in the future are 16 available. 17 The City Council recognizes that the proportionate purchase price of wastewater discharge 18 capacity may create an actual or perceived cost burden to an industry during the establishment of 19 and/or the expansion of an industry in the City of Nampa. Therefore, it is the policy of the City of 20 Nampa to offer incentives to current and future wastewater dischargers that qualify as industrial 21 customers. 22 23 Section 3: Goals. 24 This incentive policy is based on three guiding principles specifically chosen to balance the value 25 of industrial customer base expansion against the wastewater capacity reservation costs that must be 26 contributed by all wastewater service customers, including industrial customers. For industrial 27 customers the number of Equivalent Residential Units that must be purchased in order to reserve 28 capacity for the discharge volume and/or the strength and variety of additional waste stream 29 constituents can be a significant cost to establishing or expanding in the City of Nampa. Therefore, the 30 benefit of incentive policies is to mitigate the perception or actual financial burden that capacity 31 reservation fees, while equitable, create a barrier to expansion of Nampa’s industrial base compared to 32 other communities.
Page 20 of 60 1 These guiding principles for incentive policies are: 2 1. The incentive policies should be complementary with Nampa’s economic development 3 strategy. 4 2. The incentive policies should provide real value for industrial development and existing 5 industry expansion. 6 3. The financial impact of the implementation of the incentive policies must balance costs and 7 benefits to prevent the degradation of the financial integrity of the Wastewater Enterprise 8 Fund. 9 10 Section 4: Definitions. (Reserved) 11 A. Equivalent Residential Unit (ERU). (Reserved) 12 B. Fair Market Value. Fair Market Value is defined as the Equivalent Residential Unit Connection Fee as 13 determined by the cost-of-service analysis as adopted at the time of the submission of the 14 Incentives Petition. 15 C. Net Capacity. Net capacity is the difference between the amount of wastewater treatment capacity 16 used by the existing customers and eighty-five percent (85%) of the total available wastewater 17 treatment capacity. 18 D. Wastewater System Capacity Right. (Reserved) 19 20 Section 5: Discharge and Pretreatment Requirements. 21 This policy does not and is not intended to supersede existing Nampa City Code and regulations 22 regarding wastewater discharge and pretreatment requirements. Industrial customers seeking 23 incentives under this policy must still comply with all Nampa City Code and regulations governing 24 wastewater discharge permits and wastewater pretreatment.2 If any portion of this incentives policy or 25 an agreement under this policy is found to be in conflict with discharge permit and pretreatment 26 requirements, the discharge and pretreatment requirements shall govern. Application for a discharge 27 permit should be done prior to or in conjunction with any incentives application so discharge and 28 pretreatment requirements are clarified before entering into an incentives agreement. 29 30
2 Title 8, Chapters 2 and 9 of Nampa City Code. Associated discharge permit regulations, forms, and applications are available from the Wastewater Division of the Public Works Department.
Page 21 of 60 1 Section 6: Incentives. 2 The City Council authorizes the Public Works Director and the Economic Development Director 3 to use any combination of the following incentive mechanisms to assist a current industrial class 4 customer, or a prospective industrial class customer in acquiring wastewater discharge capacity. Any 5 incentive(s) proposed to be provided as authorized by this section is subject to final approval of the City 6 Council, which may accept, reject, or amend any proposed agreement, contract or other documentation 7 that specifically implements such incentives. Discussions, verbal or written requests, or petitions 8 relative to incentive mechanisms will not constitute or imply any right to wastewater discharge capacity 9 prior to final approval of the City Council. 10 A. Loan of Wastewater System Capacity. 11 An industrial customer seeking to borrow wastewater treatment capacity shall submit a completed 12 Wastewater Treatment Capacity Reservation Loan Petition to the City of Nampa Public Works 13 Department. 14 i. A loan of wastewater treatment capacity may be provided for a period of up to two (2) 15 years. 16 ii. Within an estimated ten (10) business days of receipt of the completed Loan Petition, the 17 Engineering Division of the Public Works Department shall determine if the wastewater 18 treatment system has the capacity and technical capability to serve the treatment needs of 19 the industrial customer. The Engineering Division will accept, reject, or return the petition 20 to the petitioner for additional or revised information, based on that capacity determination 21 and technical evaluation. 22 a. If additional or revised information is requested, the Engineering Division shall 23 provide an explanation for the need for additional or revised information. A 24 petition returned to the petitioner for additional or revised information may be 25 resubmitted at any time and would be subject to the requirements of Section 26 6.A.(ii). 27 b. The Engineering Division shall provide written notification to the petitioner prior 28 to the end of the estimated ten (10) business days deadline for petition 29 determination if additional time is needed for review of the petition. 30 iii. Once the completed Loan Petition is received and reviewed, the Engineering Division may 31 recommend that the City provide a portion of or all of the requested capacity of the
Page 22 of 60 1 wastewater treatment capacity available at the time of the receipt of the loan petition 2 subject to requisite assessment and measurement. 3 iv. Any such recommendation for a Loan of Wastewater System Capacity will be forwarded to
4 the Economic Development Director within an estimated three (3) business days. 5 v. The provision of the loan of wastewater treatment capacity is subject to the economic 6 impact requirements for industrial customer incentives specified in Section 8. 7 vi. The Economic Development Director will receive and review the recommendation of the 8 Public Works Department and will collect information necessary to determine that the 9 economic impact requirements specified in Section 8 would be met through the provision of 10 the loan of capacity. 11 vii. Following the economic impact determination required in subsection 6.A.(vi), the Economic 12 Development Director will transfer the Loan Petition to the Public Works Director with one 13 of the following actions: 14 1. Approved by the Economic Development Director and recommended for 15 approval by the City Council; 16 2. Forwarded by the Economic Development Director for consideration of the 17 City Council without recommendation; or, 18 3. Not recommended by the Economic Development Director. 19 viii. After receiving a loan petition from the Economic Development Director pursuant to 20 subsection vii (1.) or vii (2.), the Public Works Director will forward the petition to the City 21 Attorney who will prepare a Loan of Wastewater Capacity Agreement for consideration of 22 the City Council. 23 a. If a loan petition is not recommended by the Economic Development Director pursuant 24 to subsection vii (3.), the Public Works Director may report this finding to the City 25 Council. 26 b. Further, the Public Works Director will provide written notification to the petitioner that 27 the loan petition failed to meet the economic impact requirements for industrial 28 customer incentives as specified in Section 8. 29 ix. The City Council may also further amend the Loan of Wastewater Capacity Agreement as 30 provided in Section 6.H. 31 x. The City Council will make the final determination on the Loan of Wastewater Capacity 32 Agreement, estimated to be 35 days after receipt of Petition.
Page 23 of 60 1 xi. Loan of Capacity – Recall Provision. During the two (2) year loan period, and except for the 2 last one-hundred and twenty (120) days of the loan period, a loan of wastewater capacity 3 could be recalled by the City if; 4 a. In the City’s discretion, it wishes to sell or lease the loaned capacity to another 5 qualifying industrial customer, or; 6 b. The City requires the loaned capacity to be returned to the City in order to meet its 7 expansion planning requirements. 8 c. If the City recalls loaned capacity it will provide the borrower a written notice of intent 9 to recall loaned capacity that includes a deadline for recall of one-hundred and twenty 10 (120) calendar days from the date of issuance of the notice. The notice of intent will be 11 provided to the borrower by certified mail. 12 d. The industrial customer that has borrowed wastewater treatment capacity has ninety 13 (90) days from the date of issuance of the written notice of intent to recall loaned 14 capacity to: 15 i. Agree to stop the use of all borrowed wastewater treatment capacity, or; 16 ii. Petition to lease or purchase all or part of the borrowed wastewater treatment 17 capacity according to the requirements of Section 6.B. or Section 6.C. 18 1. Upon written notice of intent to the City to lease all or part of the 19 borrowed wastewater treatment capacity, a signed written agreement 20 between the City and the industrial customer must be completed within 21 an estimated ninety (90) days. 22 2. Upon written notice of intent to the City to purchase all or part of the 23 borrowed wastewater treatment capacity, a signed written agreement 24 between the City and the industrial customer must be completed within 25 an estimated ninety (90) days. 26 B. Lease of Wastewater System Capacity. 27 An industrial customer seeking to lease wastewater treatment capacity shall submit a completed 28 Wastewater Treatment Capacity Reservation Lease Petition to the City of Nampa Public Works 29 Department. 30 i. The agreement to lease capacity shall not exceed five (5) years. 31 ii. Within an estimated ten (10) business days of receipt of the completed Lease Petition, the 32 Engineering Division of the Public Works Department shall determine if the wastewater
Page 24 of 60 1 treatment system has the capacity and technical capability to serve the treatment needs of 2 the industrial customer. The Engineering Division will accept, reject, or return the petition 3 to the petitioner for additional or revised information, based on that capacity determination 4 and technical evaluation. 5 a. If additional or revised information is requested, the Engineering Division shall 6 provide an explanation for the need for additional or revised information. A 7 petition returned to the petitioner for additional or revised information may be 8 resubmitted at any time and would be subject to the requirements of Section 9 6.B.(ii). 10 b. The Engineering Division shall provide written notification to the petitioner prior 11 to the end of the estimated ten (10) business days deadline for petition 12 determination if additional time is needed for review of the petition. 13 iii. Once the completed Lease Petition is received and reviewed, the Engineering Division may 14 recommend that the City provide a portion of or all of the requested capacity of the 15 wastewater treatment capacity available at the time of the receipt of the lease petition 16 subject to requisite assessment and measurement. 17 iv. Any such recommendation for a Lease of Wastewater System Capacity will be forwarded to 18 the Economic Development Director within an estimated three (3) business days. 19 v. If the petitioning industrial customer has not previously satisfied the requirements of 20 Section 8, the provision of the lease incentive of wastewater treatment capacity is subject to 21 the economic impact requirements for industrial customer incentives specified in Section 8. 22 vi. The Economic Development Director will receive and review the recommendation of the 23 Public Works Department and will collect information necessary to determine that the 24 economic impact requirements specified in Section 8 would be met through the provision of 25 the lease of capacity. 26 vii. Following the economic impact determination required in subsection 6.A.(vi), the Economic 27 Development Director will transfer the Lease Petition to the Public Works Director with one 28 of the following actions: 29 1. Approved by the Economic Development Director and recommended for 30 approval by the City Council; 31 2. Forwarded by the Economic Development Director for consideration of the 32 City Council without recommendation; or,
Page 25 of 60 1 3. Not recommended by the Economic Development Director. 2 viii. After receiving a lease petition from the Economic Development Director pursuant to 3 subsection vii (1.) or vii (2.), the Public Works Director will forward the petition to the City 4 Attorney who will prepare a Lease of Wastewater Capacity Agreement for consideration of 5 the City Council. If a lease petition is not recommended by the Director of the Office of 6 Economic Development pursuant to subsection vii (3.), the Public Works Director may report 7 this finding to the City Council. 8 a. Further, the Public Works Director will provide written notification to the petitioner that 9 the lease petition failed to meet the economic impact requirements for industrial 10 customer incentives as specified in Section 8. 11 ix. The City Council may also further amend the Lease of Wastewater Capacity Agreement as 12 provided in Section 6.H. 13 x. The City Council will make the final determination on the Lease of Wastewater Capacity 14 Agreement, estimated to be 35 days after receipt of Petition. 15 xi. Wastewater treatment capacity that is being used through the lease agreement is subject to 16 recall. During the lease period, and except for the last one-hundred and twenty (120) days 17 of the lease period, a lease of wastewater capacity could be recalled by the City if; 18 a. In the City’s discretion, it wishes to sell the leased capacity to another qualifying 19 industrial customer, or; 20 b. The City requires the leased wastewater system capacity to be returned to the 21 City in order to meet its expansion planning requirements. 22 xii. If the City recalls leased capacity it must provide the lessee with a written notice of intent to 23 recall leased capacity that includes a deadline for recall of one-hundred and twenty (120) 24 calendar days from the date of issuance of the notice. The notice of intent must be 25 provided to the lessee by certified mail. 26 xiii. The industrial customer that has leased wastewater treatment capacity has ninety (90) days 27 from the date of issuance of the written notice of intent to recall leased capacity to: 28 a. Agree to stop the use of all leased wastewater treatment capacity, or; 29 b. Petition to purchase all or part of the leased wastewater treatment capacity 30 according to the requirements of Section 6.C. 31 32
Page 26 of 60 1 C. Purchase of Wastewater System Capacity. 2 An industrial customer seeking to purchase wastewater treatment capacity shall submit a 3 completed Wastewater Treatment Capacity Reservation Purchase Petition to the City of Nampa 4 Public Works Department. 5 i. Within an estimated ten (10) business days of receipt of the completed Purchase Petition, 6 the Engineering Division shall determine if the wastewater treatment system has the 7 capacity and technical capability to serve the treatment needs of the industrial customer. 8 The Engineering Division will accept, reject, or return the petition to the petitioner for 9 additional or revised information, based on that capacity determination and technical 10 evaluation. 11 a. If additional or revised information is requested, the Engineering Division shall 12 provide an explanation for the need for additional or revised information. A 13 petition returned to the petitioner for additional or revised information may be 14 resubmitted at any time and would be subject to the requirements of Section 15 6.C.(i). 16 b. The Engineering Division shall provide written notification to the petitioner prior 17 to the end of the estimated ten (10) business days deadline for petition 18 determination if additional time is needed for review of the petition. 19 ii. If the Purchase Petition is accepted, the Engineering Division may recommend that the City 20 provide a portion of or all of the requested capacity of the wastewater treatment capacity 21 available at the time of the receipt of the purchase petition subject to requisite assessment 22 and measurement. 23 iii. If the industrial customer wishes to purchase a reservation of wastewater treatment 24 capacity without an amortization incentive, the industrial customer shall remit, within a 25 reasonable period determined by the Public Works Department, the full payment for the 26 fair market value of the reservation of system capacity. 27 iv. If an industrial customer seeking to purchase a reservation of wastewater treatment 28 capacity has submitted a completed Purchase Petition that includes a request for an 29 amortization incentive, and if the Engineering Division has recommended the purchase 30 petition based on the capacity determination and technical evaluation, then any such 31 recommendation for a purchase of Wastewater System Capacity will be forwarded to the 32 Economic Development Director within an estimated three (3) business days.
Page 27 of 60 1 a. The amortization incentive allows the industrial customer to purchase wastewater 2 system capacity by amortizing the purchase over a period of up to ten (10) years. 3 v. If the petitioning industrial customer has not previously satisfied the requirements of 4 Section 8, the provision of the purchase incentive of wastewater treatment capacity is 5 subject to the economic impact requirements for industrial customer incentives specified in 6 Section 8. 7 vi. The Economic Development Director will receive and review the recommendation of the 8 Public Works Department and will collect information necessary to determine that the 9 economic impact requirements specified in Section 8 would be met through the provision of 10 the purchase of capacity. The Economic Development Director will transfer the Purchase 11 Petition to the Public Works Director with one of the following actions: 12 1. Approved by the Economic Development Director and recommended for 13 approval by the City Council; 14 2. Forwarded by the Economic Development Director for consideration of the 15 City Council without recommendation; or, 16 3. Not recommended by the Economic Development Director. 17 viii. After receiving a purchase petition from the Economic Development Director pursuant to 18 subsection vii (1.) or vii (2.), the Public Works Director will forward the petition to the City 19 Attorney who will prepare a Purchase of Wastewater Capacity Agreement for consideration 20 of the City Council. 21 a. If a purchase petition is not recommended by the Economic Development Director 22 pursuant to subsection vii (3.), the Public Works Director may report this finding to the 23 City Council. 24 b. Further, the Public Works Director will provide written notification to the petitioner that 25 the purchase petition failed to meet the economic impact requirements for industrial 26 customer incentives as specified in Section 8. 27 ix. As compensation to the City for the ability to acquire wastewater treatment capacity 28 through an amortization agreement, the industrial customer shall pay, in additional to equal 29 monthly installment payments, an interest charge. 30 a. If the amortization period is ten (10) years, then the interest charge shall be equivalent 31 to the Prime Rate as published in the Wall Street Journal on the nearest date to the
Page 28 of 60 1 execution of the amortization agreement, plus one-hundred (100) basis points, on the 2 full cost of the purchased wastewater treatment capacity reservation. 3 b. If the amortization period is up to five (5) years, then the interest charge shall be 4 equivalent to the Prime Rate as published in the Wall Street Journal on the nearest date 5 to the execution of the amortization agreement, plus fifty (50) basis points, on the full 6 cost of the purchased wastewater treatment capacity reservation. 7 x. The City Council may also further amend the original or amended Purchase Petition as 8 provided in Section 6.H. 9 xi. The City Council will make the final determination on the Purchase Petition, estimated to be 10 35 days after receipt of Petition. 11 xii. A duly executed amortization agreement provides the industrial customer with certain 12 wastewater capacity rights. However, failure to complete the terms of the amortization 13 agreement relinquishes any rights for the unpaid portion of wastewater treatment capacity 14 to the City. 15 D. Short-Term Loan of Wastewater System Capacity 16 An industrial user holding a current Industrial Discharge Permit (“Customer”) seeking to borrow 17 wastewater treatment capacity for no more than thirty (30) days shall submit a completed 18 Wastewater Treatment Capacity Reservation Short-Term Loan Petition (“Short-Term Loan Petition”) 19 to the City of Nampa Public Works Department (“Department”). 20 i. Within an estimated two (2) business days of receipt of the completed Short-Term Loan 21 Petition, the Department shall determine if the wastewater treatment system has the 22 capacity and technical capability to safely and adequately provide the requested treatment 23 needs of the Customer. The Department will accept, reject, or return the Short-Term Loan 24 Petition to the Customer for additional or revised information. 25 ii. If additional or revised information is requested, the Department shall provide an 26 explanation of the need for the additional or revised information. A Short-Term Loan 27 Petition returned to the Customer for additional or revised information may be resubmitted 28 at any time and would be subject to the review required by Section 6.D.(i). 29 iii. The Department shall provide written notification to the Customer prior to the end of the 30 estimated two (2) business day deadline for determination if additional time is needed for 31 review.
Page 29 of 60 1 iv. If the Short-Term Loan Petition is accepted, the Department will provide all or a portion of 2 the requested treatment capacity subject to requisite assessment and measurement. 3 v. The Department will present the results of the Short-Term Loan Petition to the City Council 4 at the next regularly scheduled City Council meeting as an information item. The City Council 5 may further amend the Department’s decision as provided in Section 6.H. 6 vi. Short-term loans of wastewater treatment capacity are subject to the following: 7 a. Short-term loans may only be granted if the Customer is in compliance with the 8 current Industrial Discharge Permit. 9 b. The maximum duration of a short-term loan of wastewater treatment capacity is 10 thirty (30) days and any short-term loan approval shall specify its applicable 11 dates. 12 c. Short-term loans of wastewater treatment capacity can only be requested once 13 every calendar year. 14 d. The cost for short-term loans of wastewater treatment capacity shall be the 15 current constituent rate plus fifteen (15) percent. This rate will only apply to the 16 amount of wastewater treatment capacity approved by the City Council for the 17 short-term loan. 18 E. Transferability of Purchased Wastewater Treatment Capacity Reservations. 19 Industrial customers that have purchased wastewater treatment capacity rights may, subject to the 20 approval of the Engineering Division of the Public Works Department, transfer all or some portion of 21 their capacity rights to another industrial facility owned by the same corporation. Such capacity 22 reservation right transfers would be subject to the following: 23 1. The industry would be required to submit a completed Wastewater Capacity Reservation 24 Transfer Request Form for consideration by the Engineering Division. 25 2. The transfer would be dependent on the capabilities of the City’s collection system to 26 handle the wastewater at the alternate location. Within an estimated thirty (30) days of 27 receiving the Wastewater Capacity Reservation Transfer Request, the Engineering Division 28 will provide a written response to the industry that determines whether or not the transfer 29 is technically feasible, and whether the Transfer Request is accepted or rejected. 30 a. The assessment of technical feasibility shall include comparable analysis of the 31 physical facilities at both the donor and recipient sites (i.e. pump stations, pipelines,
Page 30 of 60 1 and other physical facilities), and the comparable analysis of wastewater 2 constituents discharged at both sites. 3 3. If the transfer request is technically feasible, and the Transfer Request is accepted by the 4 Engineering Division, all costs related to the modification of the physical structures for the 5 collection of wastewater at the proposed site will be the responsibility of the petitioning 6 industrial customer. 7 F. Industrial Customer Capacity Exchange. 8 Industrial customers that have acquired wastewater capacity rights may make part or all of such 9 capacity available for purchase by existing industrial customers, prospective industrial customers, or 10 the City of Nampa. The exchange of capacity reservations between qualified industrial customers is 11 subject to the following: 12 1. Parties to the Exchange of Capacity Reservations. The exchange of acquired wastewater 13 capacity rights may occur between existing industrial customers, prospective industrial 14 customers, and the City of Nampa. An existing industrial customer offering wastewater 15 capacity rights for sale is required at the time of such offering to be in compliance with 16 discharge permit requirements and to have been in compliance with discharge permit 17 requirements for a period of six (6) months prior to the time of such offering. 18 a. The permit compliance requirement may be waived by the City if it is determined 19 that the exchange of capacity rights will not create an adverse permit condition by 20 either party to the exchange. 21 2. Wastewater Capacity Rights Exchange Petition. The parties to any exchange of capacity 22 reservations shall submit a completed Wastewater Capacity Rights Exchange Petition for 23 consideration by the Engineering Division of the Public Works Department. 24 3. Technical Review of Proposed Capacity Exchanges. The Engineering Division will evaluate 25 any proposed capacity rights exchange submitted in accordance with Section 6.F.(2.) based 26 on the technical requirements of the parties and the capacity of the wastewater system to 27 accommodate the proposed exchange. The Engineering Division will prepare an evaluation 28 report of the Capacity Rights Exchange Petition. 29 a. Technical Review Administrative Cost Fee. The Public Works Department shall 30 assess a fee to recover the technical review and administrative costs of evaluating 31 the proposed wastewater capacity rights exchange petition. Such fee shall be paid 32 by the primary party bringing the petition for review.
Page 31 of 60 1 4. Approval or Rejection of Capacity Exchanges. The Engineering Division will provide written 2 response to the parties of the proposed wastewater capacity rights exchange within an 3 estimated ten (10) business days. The Engineering Division may approve or reject the 4 Wastewater Capacity Reservation Rights Petition. 5 G. Pretreatment and Voluntary Environmental Improvement Financing. (Reserved) 6 H. City Council Enhancements to Industrial Incentive Policy Wastewater Capacity Loan, Lease, and 7 Purchase Agreements. 8 Notwithstanding the provisions of this Industrial Incentives Policy, the Nampa City Council may 9 further incentivize the expansion of the industrial customer base by establishing contractual 10 agreements with potential and existing industrial customers for wastewater treatment capacity 11 rights. 12 I. Effective Date, Sunset, and Evaluation Requirement of Incentive Policies. 13 All sections of the Nampa Wastewater Fund Industrial Incentive Policies shall expire five (5) years 14 after the date of enactment unless extended by a majority vote of the City Council. 15 1. One (1) year prior to the expiration of the Nampa wastewater Fund Industrial Incentive 16 Policies, the Office of the Mayor will conduct a cost benefit analysis of the effectiveness of 17 the policies and deliver said report to the City Council. 18 2. Notwithstanding Section I.(1.), any agreements implemented through this policy shall 19 remain in force according to the specific terms contained in such agreements. 20 21 Section 7: Capacity Optimization Fee. 22 The Capacity Optimization Fee (COFee) is established for the purpose of incentivizing the most 23 efficient use of wastewater system capacity rights. Providing treatment capacity that is reserved and 24 not utilized presents true costs to the community. The COFee compensates for those costs while 25 incentivizing the exchange of unused capacity to other existing or new industrial customers. 26 A. The COFee will be assessed according to the following: 27 1. For the purposes of this section, full utilization of wastewater system capacity rights occurs 28 when actual discharge is equal to the permit limits. 29 2. Full utilization of wastewater system capacity as permitted consists of maximum monthly 30 discharge levels as indicated in each specific industrial discharge permit. 31 3. Such permitted discharge constituents include; 32 i. Flow
Page 32 of 60 1 ii. Biological Oxygen Demand 2 iii. Total Suspended Solids 3 iv. Total Kjeldahl Nitrogen 4 v. Total Phosphorus 5 4. The Capacity Optimization Fee (COFee) will be assessed on the difference between the 6 permitted capacity, as described in subsection 7.A.(1.), and one hundred and fifteen percent 7 (115%) of the maximum monthly discharge level on for the previous twelve (12) months for 8 each of the constituents in the industrial discharge permits. The calculation of the COFee 9 assessment will be established through the rate policy. The COFee will be billed on an 10 annual basis by fiscal year with the option for monthly payments. 11 5. At the discretion of the industrial customer, the COFee calculation for Biological Oxygen 12 Demand (BOD) may be measured as Chemical Oxygen Demand (COD). If this option is 13 exercised, the following shall apply; 14 i. The City shall at its sole discretion determine the appropriate conversion 15 factor between BOD and COD based on historical industrial discharge data 16 and the need to protect the City from permit violations. 17 ii. The use of COD as a surrogate for BOD for the COFee calculation shall not 18 modify the limits of the Industrial Discharge Permit in any manner. 19 20 Section 8: Economic Impact Benefit Requirements for Industrial Customer Incentives. (Reserved) [This 21 section will be a direct reference to economic development policy, and will likely reflect the thresholds 22 for economic development established by the current Community Development Block Grant program.] 23 24 Section 9: Forms 25 A. Wastewater Industrial Incentives Policy Petition Form October 28, 2015. (Attachment A)
Page 33 of 60 Exhibit B
Page 34 of 60 Page 35 of 60 Exhibit C 9/24/2020 Admiral Beverage Company
Annual Interest Rate 3.750% Years 5 Payments Per Year 12 Amount $230,221.97 Totals ($252,837.85) ($230,221.97) ($22,615.88) Payment Number Payment Date Payment Principal Interest Balance 1 11/15/2020 ($4,213.96) ($3,494.52) ($719.44) $226,727.45 252837.6 2 12/15/2020 ($4,213.96) ($3,505.44) ($708.52) $223,222.01 3 1/15/2021 ($4,213.96) ($3,516.40) ($697.57) $219,705.61 4 2/15/2021 ($4,213.96) ($3,527.38) ($686.58) $216,178.23 5 3/15/2021 ($4,213.96) ($3,538.41) ($675.56) $212,639.82 6 4/15/2021 ($4,213.96) ($3,549.46) ($664.50) $209,090.36 7 5/15/2021 ($4,213.96) ($3,560.56) ($653.41) $205,529.80 8 6/15/2021 ($4,213.96) ($3,571.68) ($642.28) $201,958.12 9 7/15/2021 ($4,213.96) ($3,582.85) ($631.12) $198,375.27 10 8/15/2021 ($4,213.96) ($3,594.04) ($619.92) $194,781.23 11 9/15/2021 ($4,213.96) ($3,605.27) ($608.69) $191,175.96 12 10/15/2021 ($4,213.96) ($3,616.54) ($597.42) $187,559.42 13 11/15/2021 ($4,213.96) ($3,627.84) ($586.12) $183,931.58 14 12/15/2021 ($4,213.96) ($3,639.18) ($574.79) $180,292.40 15 1/15/2022 ($4,213.96) ($3,650.55) ($563.41) $176,641.85 16 2/15/2022 ($4,213.96) ($3,661.96) ($552.01) $172,979.89 17 3/15/2022 ($4,213.96) ($3,673.40) ($540.56) $169,306.49 18 4/15/2022 ($4,213.96) ($3,684.88) ($529.08) $165,621.61 19 5/15/2022 ($4,213.96) ($3,696.40) ($517.57) $161,925.21 20 6/15/2022 ($4,213.96) ($3,707.95) ($506.02) $158,217.26 21 7/15/2022 ($4,213.96) ($3,719.54) ($494.43) $154,497.73 22 8/15/2022 ($4,213.96) ($3,731.16) ($482.81) $150,766.57 23 9/15/2022 ($4,213.96) ($3,742.82) ($471.15) $147,023.75 24 10/15/2022 ($4,213.96) ($3,754.51) ($459.45) $143,269.24 25 11/15/2022 ($4,213.96) ($3,766.25) ($447.72) $139,502.99 26 12/15/2022 ($4,213.96) ($3,778.02) ($435.95) $135,724.97 27 1/15/2023 ($4,213.96) ($3,789.82) ($424.14) $131,935.15 28 2/15/2023 ($4,213.96) ($3,801.67) ($412.30) $128,133.48 29 3/15/2023 ($4,213.96) ($3,813.55) ($400.42) $124,319.93 30 4/15/2023 ($4,213.96) ($3,825.46) ($388.50) $120,494.47 31 5/15/2023 ($4,213.96) ($3,837.42) ($376.55) $116,657.05 32 6/15/2023 ($4,213.96) ($3,849.41) ($364.55) $112,807.64 33 7/15/2023 ($4,213.96) ($3,861.44) ($352.52) $108,946.20 34 8/15/2023 ($4,213.96) ($3,873.51) ($340.46) $105,072.69 35 9/15/2023 ($4,213.96) ($3,885.61) ($328.35) $101,187.08 36 10/15/2023 ($4,213.96) ($3,897.75) ($316.21) $97,289.33 37 11/15/2023 ($4,213.96) ($3,909.93) ($304.03) $93,379.39 38 12/15/2023 ($4,213.96) ($3,922.15) ($291.81) $89,457.24 39 1/15/2024 ($4,213.96) ($3,934.41) ($279.55) $85,522.83 40 2/15/2024 ($4,213.96) ($3,946.71) ($267.26) $81,576.12 41 3/15/2024 ($4,213.96) ($3,959.04) ($254.93) $77,617.08 42 4/15/2024 ($4,213.96) ($3,971.41) ($242.55) $73,645.67 43 5/15/2024 ($4,213.96) ($3,983.82) ($230.14) $69,661.85 44 6/15/2024 ($4,213.96) ($3,996.27) ($217.69) $65,665.58 45 7/15/2024 ($4,213.96) ($4,008.76) ($205.20) $61,656.82 46 8/15/2024 ($4,213.96) ($4,021.29) ($192.68) $57,635.53 47 9/15/2024 ($4,213.96) ($4,033.85) ($180.11) $53,601.68 48 10/15/2024 ($4,213.96) ($4,046.46) ($167.51) $49,555.22 49 11/15/2024 ($4,213.96) ($4,059.10) ($154.86) $45,496.12 50 12/15/2024 ($4,213.96) ($4,071.79) ($142.18) $41,424.33 51 1/15/2025 ($4,213.96) ($4,084.51) ($129.45) $37,339.82 52 2/15/2025 ($4,213.96) ($4,097.28) ($116.69) $33,242.54 53 3/15/2025 ($4,213.96) ($4,110.08) ($103.88) $29,132.46 54 4/15/2025 ($4,213.96) ($4,122.93) ($91.04) $25,009.53 55 5/15/2025 ($4,213.96) ($4,135.81) ($78.15) $20,873.72 56 6/15/2025 ($4,213.96) ($4,148.73) ($65.23) $16,724.99 57 7/15/2025 ($4,213.96) ($4,161.70) ($52.27) $12,563.29 58 8/15/2025 ($4,213.96) ($4,174.70) ($39.26) $8,388.59 59 9/15/2025 ($4,213.96) ($4,187.75) ($26.21) $4,200.84 60 10/15/2025 ($4,213.96) ($4,200.84) ($13.13) $0.00
3.75% Page(3.25 WSJ 36 Septof 60 2020) Pg.1of3 9/24/2020 Admiral Beverage Company
Annual Interest Rate 1.875% Years 5 Payments Per Year 12 Amount $230,221.97 Totals ($241,361.90) ($230,221.97) ($11,139.93) Payment Number Payment Date Payment Principal Interest Balance 1 11/15/2020 ($4,022.70) ($3,662.98) ($359.72) $226,558.99 2 12/15/2020 ($4,022.70) ($3,668.70) ($354.00) $222,890.29 3 1/15/2021 ($4,022.70) ($3,674.43) ($348.27) $219,215.86 4 2/15/2021 ($4,022.70) ($3,680.17) ($342.52) $215,535.69 5 3/15/2021 ($4,022.70) ($3,685.92) ($336.77) $211,849.76 6 4/15/2021 ($4,022.70) ($3,691.68) ($331.02) $208,158.08 7 5/15/2021 ($4,022.70) ($3,697.45) ($325.25) $204,460.63 8 6/15/2021 ($4,022.70) ($3,703.23) ($319.47) $200,757.40 9 7/15/2021 ($4,022.70) ($3,709.01) ($313.68) $197,048.39 10 8/15/2021 ($4,022.70) ($3,714.81) ($307.89) $193,333.58 11 9/15/2021 ($4,022.70) ($3,720.61) ($302.08) $189,612.96 12 10/15/2021 ($4,022.70) ($3,726.43) ($296.27) $185,886.53 13 11/15/2021 ($4,022.70) ($3,732.25) ($290.45) $182,154.28 14 12/15/2021 ($4,022.70) ($3,738.08) ($284.62) $178,416.20 15 1/15/2022 ($4,022.70) ($3,743.92) ($278.78) $174,672.28 16 2/15/2022 ($4,022.70) ($3,749.77) ($272.93) $170,922.50 17 3/15/2022 ($4,022.70) ($3,755.63) ($267.07) $167,166.87 18 4/15/2022 ($4,022.70) ($3,761.50) ($261.20) $163,405.37 19 5/15/2022 ($4,022.70) ($3,767.38) ($255.32) $159,637.99 20 6/15/2022 ($4,022.70) ($3,773.26) ($249.43) $155,864.73 21 7/15/2022 ($4,022.70) ($3,779.16) ($243.54) $152,085.57 22 8/15/2022 ($4,022.70) ($3,785.06) ($237.63) $148,300.51 23 9/15/2022 ($4,022.70) ($3,790.98) ($231.72) $144,509.53 24 10/15/2022 ($4,022.70) ($3,796.90) ($225.80) $140,712.62 25 11/15/2022 ($4,022.70) ($3,802.83) ($219.86) $136,909.79 26 12/15/2022 ($4,022.70) ($3,808.78) ($213.92) $133,101.01 27 1/15/2023 ($4,022.70) ($3,814.73) ($207.97) $129,286.28 28 2/15/2023 ($4,022.70) ($3,820.69) ($202.01) $125,465.60 29 3/15/2023 ($4,022.70) ($3,826.66) ($196.04) $121,638.94 30 4/15/2023 ($4,022.70) ($3,832.64) ($190.06) $117,806.30 31 5/15/2023 ($4,022.70) ($3,838.63) ($184.07) $113,967.67 32 6/15/2023 ($4,022.70) ($3,844.62) ($178.07) $110,123.05 33 7/15/2023 ($4,022.70) ($3,850.63) ($172.07) $106,272.42 34 8/15/2023 ($4,022.70) ($3,856.65) ($166.05) $102,415.77 35 9/15/2023 ($4,022.70) ($3,862.67) ($160.02) $98,553.10 36 10/15/2023 ($4,022.70) ($3,868.71) ($153.99) $94,684.39 37 11/15/2023 ($4,022.70) ($3,874.75) ($147.94) $90,809.63 38 12/15/2023 ($4,022.70) ($3,880.81) ($141.89) $86,928.83 39 1/15/2024 ($4,022.70) ($3,886.87) ($135.83) $83,041.95 40 2/15/2024 ($4,022.70) ($3,892.95) ($129.75) $79,149.01 41 3/15/2024 ($4,022.70) ($3,899.03) ($123.67) $75,249.98 42 4/15/2024 ($4,022.70) ($3,905.12) ($117.58) $71,344.86 43 5/15/2024 ($4,022.70) ($3,911.22) ($111.48) $67,433.64 44 6/15/2024 ($4,022.70) ($3,917.33) ($105.37) $63,516.31 45 7/15/2024 ($4,022.70) ($3,923.45) ($99.24) $59,592.85 46 8/15/2024 ($4,022.70) ($3,929.58) ($93.11) $55,663.27 47 9/15/2024 ($4,022.70) ($3,935.72) ($86.97) $51,727.54 48 10/15/2024 ($4,022.70) ($3,941.87) ($80.82) $47,785.67 49 11/15/2024 ($4,022.70) ($3,948.03) ($74.67) $43,837.63 50 12/15/2024 ($4,022.70) ($3,954.20) ($68.50) $39,883.43 51 1/15/2025 ($4,022.70) ($3,960.38) ($62.32) $35,923.05 52 2/15/2025 ($4,022.70) ($3,966.57) ($56.13) $31,956.48 53 3/15/2025 ($4,022.70) ($3,972.77) ($49.93) $27,983.72 54 4/15/2025 ($4,022.70) ($3,978.97) ($43.72) $24,004.74 55 5/15/2025 ($4,022.70) ($3,985.19) ($37.51) $20,019.55 56 6/15/2025 ($4,022.70) ($3,991.42) ($31.28) $16,028.13 57 7/15/2025 ($4,022.70) ($3,997.65) ($25.04) $12,030.48 58 8/15/2025 ($4,022.70) ($4,003.90) ($18.80) $8,026.58 59 9/15/2025 ($4,022.70) ($4,010.16) ($12.54) $4,016.42 60 10/15/2025 ($4,022.70) ($4,016.42) ($6.28) $0.00
1.875%Page 37 of 60 Pg.2of3 9/24/2020 Admiral Beverage Company
Annual Interest Rate 0.000% Years 5 Payments Per Year 12 Amount $230,221.97 Totals ($230,221.97) ($230,221.97) $0.00 Payment Number Payment Date Payment Principal Interest Balance 1 11/15/2020 ($3,837.03) ($3,837.03) $0.00 $226,384.94 252837.6 2 12/15/2020 ($3,837.03) ($3,837.03) $0.00 $222,547.90 3 1/15/2021 ($3,837.03) ($3,837.03) $0.00 $218,710.87 4 2/15/2021 ($3,837.03) ($3,837.03) $0.00 $214,873.84 5 3/15/2021 ($3,837.03) ($3,837.03) $0.00 $211,036.81 6 4/15/2021 ($3,837.03) ($3,837.03) $0.00 $207,199.77 7 5/15/2021 ($3,837.03) ($3,837.03) $0.00 $203,362.74 8 6/15/2021 ($3,837.03) ($3,837.03) $0.00 $199,525.71 9 7/15/2021 ($3,837.03) ($3,837.03) $0.00 $195,688.67 10 8/15/2021 ($3,837.03) ($3,837.03) $0.00 $191,851.64 11 9/15/2021 ($3,837.03) ($3,837.03) $0.00 $188,014.61 12 10/15/2021 ($3,837.03) ($3,837.03) $0.00 $184,177.58 13 11/15/2021 ($3,837.03) ($3,837.03) $0.00 $180,340.54 14 12/15/2021 ($3,837.03) ($3,837.03) $0.00 $176,503.51 15 1/15/2022 ($3,837.03) ($3,837.03) $0.00 $172,666.48 16 2/15/2022 ($3,837.03) ($3,837.03) $0.00 $168,829.44 17 3/15/2022 ($3,837.03) ($3,837.03) $0.00 $164,992.41 18 4/15/2022 ($3,837.03) ($3,837.03) $0.00 $161,155.38 19 5/15/2022 ($3,837.03) ($3,837.03) $0.00 $157,318.35 20 6/15/2022 ($3,837.03) ($3,837.03) $0.00 $153,481.31 21 7/15/2022 ($3,837.03) ($3,837.03) $0.00 $149,644.28 22 8/15/2022 ($3,837.03) ($3,837.03) $0.00 $145,807.25 23 9/15/2022 ($3,837.03) ($3,837.03) $0.00 $141,970.21 24 10/15/2022 ($3,837.03) ($3,837.03) $0.00 $138,133.18 25 11/15/2022 ($3,837.03) ($3,837.03) $0.00 $134,296.15 26 12/15/2022 ($3,837.03) ($3,837.03) $0.00 $130,459.12 27 1/15/2023 ($3,837.03) ($3,837.03) $0.00 $126,622.08 28 2/15/2023 ($3,837.03) ($3,837.03) $0.00 $122,785.05 29 3/15/2023 ($3,837.03) ($3,837.03) $0.00 $118,948.02 30 4/15/2023 ($3,837.03) ($3,837.03) $0.00 $115,110.99 31 5/15/2023 ($3,837.03) ($3,837.03) $0.00 $111,273.95 32 6/15/2023 ($3,837.03) ($3,837.03) $0.00 $107,436.92 33 7/15/2023 ($3,837.03) ($3,837.03) $0.00 $103,599.89 34 8/15/2023 ($3,837.03) ($3,837.03) $0.00 $99,762.85 35 9/15/2023 ($3,837.03) ($3,837.03) $0.00 $95,925.82 36 10/15/2023 ($3,837.03) ($3,837.03) $0.00 $92,088.79 37 11/15/2023 ($3,837.03) ($3,837.03) $0.00 $88,251.76 38 12/15/2023 ($3,837.03) ($3,837.03) $0.00 $84,414.72 39 1/15/2024 ($3,837.03) ($3,837.03) $0.00 $80,577.69 40 2/15/2024 ($3,837.03) ($3,837.03) $0.00 $76,740.66 41 3/15/2024 ($3,837.03) ($3,837.03) $0.00 $72,903.62 42 4/15/2024 ($3,837.03) ($3,837.03) $0.00 $69,066.59 43 5/15/2024 ($3,837.03) ($3,837.03) $0.00 $65,229.56 44 6/15/2024 ($3,837.03) ($3,837.03) $0.00 $61,392.53 45 7/15/2024 ($3,837.03) ($3,837.03) $0.00 $57,555.49 46 8/15/2024 ($3,837.03) ($3,837.03) $0.00 $53,718.46 47 9/15/2024 ($3,837.03) ($3,837.03) $0.00 $49,881.43 48 10/15/2024 ($3,837.03) ($3,837.03) $0.00 $46,044.39 49 11/15/2024 ($3,837.03) ($3,837.03) $0.00 $42,207.36 50 12/15/2024 ($3,837.03) ($3,837.03) $0.00 $38,370.33 51 1/15/2025 ($3,837.03) ($3,837.03) $0.00 $34,533.30 52 2/15/2025 ($3,837.03) ($3,837.03) $0.00 $30,696.26 53 3/15/2025 ($3,837.03) ($3,837.03) $0.00 $26,859.23 54 4/15/2025 ($3,837.03) ($3,837.03) $0.00 $23,022.20 55 5/15/2025 ($3,837.03) ($3,837.03) $0.00 $19,185.16 56 6/15/2025 ($3,837.03) ($3,837.03) $0.00 $15,348.13 57 7/15/2025 ($3,837.03) ($3,837.03) $0.00 $11,511.10 58 8/15/2025 ($3,837.03) ($3,837.03) $0.00 $7,674.07 59 9/15/2025 ($3,837.03) ($3,837.03) $0.00 $3,837.03 60 10/15/2025 ($3,837.03) ($3,837.03) $0.00 $0.00
0% Page 38 of 60 Pg.3of3 New Business #2
NAMPA MUNICIPAL AIRPORT LEASE AND RENT RATE ADJUSTMENT PROPOSAL
• The update to the Nampa Municipal Airport (Airport) Master Plan began in fiscal year 2018 and was completed in fiscal year 2020 with participation from the Mayor, Airport Commission, City Council, key stakeholder group, Public Works Department and the general public
• During this process, numerous private developers sought land leases on Airport grounds to build and sublease aircraft hangars. Considering these leases brought to attention questions of lease rates, lease terms, equity among leaseholders and overall financial strategy for the Airport
• The Mayor and Public Works Director, in early 2019, requested staff work with the Airport Commission to develop a Cost of Service and Equity Study (COS)
• A work group was formed consisting of Public Works Administration staff, Airport staff, and City legal counsel. The work group met frequently throughout 2019 and developed the fiscal year 2020 COS. The study was presented to City Council members, Airport Commission (as an information item) and to the City Council on August 17, 2020, in the Public Works Department Staff Report
• Summary of Report Conclusions: o Are fees, leases, and other revenue sources allocated equitably across all users? Adjustments are recommended. The café, oversized t-hangars and twin t-hangars generate about twice as much revenue as they consume of the expense budget. Revenue from four other rate classes reimburses less than 50% of expenditures on their behalf. Each of the fifteen rate classes, including these seven, seems to be somewhat unique from all others. The cost of service rate recommendations will be used as a guide but do not include market comparison analysis. o Is the airport on a sound, sustainable financial base? With good leadership and management, the Airport continues to run a safe, efficient and well-maintained airport. The negative difference of $170,993, between fiscal year 2019 annual revenue and fiscal years 2017-2019 average annual expense, is currently managed by an annual injection of the City’s general fund (property taxes). This leaves sustainability as a somewhat dynamic condition that can change at the behest of Council or changing economic conditions for the City as a whole. o Importance of property taxes: Owners of private hangars on Airport property are assessed personal property taxes on their hangars. A Council resolution pledging the City portion of these property taxes to the Airport budget would be a resounding affirmation of Council’s support for the Airport.
Page 39 of 60 This comment comes directly from the Airport Commission. As noted above, significant annual injection of the City’s general fund is necessary to bridge the negative difference between revenue and expenses. The 2020 Idaho Airport System Plan identifies $106 million in benefits to Southwest Idaho from the Airport. A formal pledge to return owner property taxes to enhance the Airport’s expense budget promotes both equity and sustainability. Airport property owners paid $107,193 to the City in property taxes. o Cost of service study as a guide: The COS is a snapshot for one point in time; a document to be used as a reference to evaluate equity and adjust lease rates accordingly in the short term. o Conservative character of proposed lease rates: Proposed rates do not include any allowance for capital expansion or periodic City funded maintenance. Alternative funding mechanisms for capital expansion, including City funds, are under consideration.
• Using the COS as a guide, lease and rental rate adjustments were proposed to the Airport Commission. Based on Commission comments, the following updates to the lease and rental rate adjustment proposal were completed: o Reduce Land Lease Standard rate increase from $.38 to $.35 based on market comparison data. City of Boise is $.38. o Reduced Land Lease Electrical Only rate from $.33 to $.27 based on comparison to lots with access to water and sewer. o For existing land lease holders, propose rates increase half in fiscal year 2020 and the remainder in fiscal year 2025 (based on the 0 and 5 clause in the lease agreements). This provides an incremental increase for leaseholders.
• The Airport Commission did not conduct a vote on the rate proposals as concerns remained about the COS and raising rates
• Public Works staff and the Mayor are requesting the Board of Appraisers review the lease and rental rate proposals referring to the COS as a guide document. Please see the list of documents for your review and reference: o Fee Change Request Form - proposed ground lease and rental rate adjustment proposal (Exhibit A) o Ground Lease Market Analysis - compares rates to similar airports (Exhibit B) o Ground Lease Detail - actual lease and rent rate increases for each lot (Exhibit C) o Cost of Service and Equity Study (COS) (Exhibit D)
• According to current lease contracts, increases over CPI (Consumer Price Index) must be done in years ending in 0 and 5. If no adjustments are made before the end of this year, COS adjustments could not take place until 2025
Page 40 of 60 • Staff acknowledges the shift in the economic climate due to the COVID-19 pandemic. For this reason staff is proposing to split the proposed fees increase by one-half in fiscal year 2020, and the remaining one-half increase in fiscal year 2025, according to the Hangar Rentals and Land Leases Fee Change Request (Exhibit A)
REQUEST: Board of Appraisers decision and recommendation to City Council for fiscal year 2021 Airport Ground Lease and Rental Rate increase, effective January 1, 2021.
Page 41 of 60 Exhibit A
City of Nampa Fee Change Request Form
Department Public Works - Airport - Hangar Rentals and Land Leases Effective Date 01/01/2021
Trans New Current Proposed Percent Notes Code Fee? Description Fees Fees Change City Owned Rentals (monthly) Tie Downs $20.00 $20.00 0.00% $94 Increase of 2.1784% over 5 Shade Hangar $92.00 $94.00 2.17% years to reach $102 Pre 1990 T-Hangar $123.00 $125.00 1.63% Standard T-Hangar $183.00 $186.00 1.64% $75 increase of 4.444% over 5 End T-Hangar $72.00 $75.00 4.17% years to reach $88 Oversized Standard T-Hangar $202.00 $206.00 1.98% Twin T-Hangar $238.00 $242.00 1.68% $86.60 increase of 4.338% over End Twin T-Hangar $83.00 $87.00 4.82% 5 years to reach $101
Ground Leases (yearly) Land Lease - Electrical Only, Grandfathered $0.189 $0.192 1.76% For existing Land Lease holders, increase 1/2 in FY20 and Land Lease - Electrical Only, 0/5 Years $0.189 $0.234 23.81% remaining 1/2 in FY25 For existing Land Lease holders, increase 1/2 in FY20 and Land Lease - Electrical Only, 2021 $0.189 $0.280 48.15% remaining 1/2 in FY25 Land Lease - Standard Rate, Grandfathered $0.223 $0.227 1.76% For existing Land Lease holders, increase 1/2 in FY20 and Land Lease - Standard Rate, 0/5 Years $0.269 $0.309 14.87% remaining 1/2 in FY25 For existing Land Lease holders, increase 1/2 in FY20 and Land Lease - Standard Rate, 2021 $0.269 $0.350 30.11% remaining 1/2 in FY25 Land Lease - Non-Aviation (Kings) $0.242 $0.246 1.76% Land Lease - Non-Aviation (Happy Valley) $0.330 $0.336 1.76%
Comments on Competitiveness of New Rate Increase based on 2020 Airport Cost of Service Study and market analysis. Rate equitability was analyzed and the increases shown above are to bring rates to the point that each rate class is, at minimum, offsetting its equitable share of airport expenses. Proposed rates go into effect 9/30/20. *All rates increased by the Consumer Price Index (CPI) of 1.76% from October 2018 to October 2019, unless otherwise noted. **Land Lease - Non-Aviation: Per FAA these rates are established by independent land appraisals every 5 years. The next appraisal will occur in fiscal year 2021. ***Rental rates rounded to the nearest whole dollar. Reasons why Fee Change is Needed and What New Funding will be Used for Fee increase needed for daily airport operations which consists of pavement and building maintenance, upkeep of airfield grounds, personnel, utilities, etc. while maintaining the current level of service.
Page 1 of 1 Page 42 of 60 Exhibit B
Ground Lease Market Analysis - Exhibit B # of Lease Rate Airport State Operations (per sq ft) Evanston-Uinta County Airport WY 5,555 $ 0.44 Archuleta County Airport CO 13,250 $ 0.48 Heber Valley Airport UT 19,468 $ 0.35 Friedman Memorial Airport ID 26,645 $ 2.50 Pocatello Regional Airport ID 27,375 $ 0.18 McCall Municipal Airport ID 43,435 $ 0.30 Ogden-Hinckley Airport UT 74,198 $ 0.24 Cedar City Regional Airport UT 77,224 $ 0.20 Nampa Municipal Airport (current) ID 90,000 $ 0.27 Arlington Municipal Airport WA 133,590 $ 0.24 Boise Airport ID 137,240 $ 0.38 Caldwell Industrial Airport ID 141,255 $ 0.21 * Staff proposes a market rate of $0.35 for future Nampa Municipal Airport ground leases **Electrical only ground leases are proposed at $.07 below market rate
Page 43 of 60 Exhibit C
Ground Lease Detail - Exhibit C Proposed Annual Increases Per Lot
Proposed Proposed Proposed SF Proposed Annual Electrical Only Lots (0/5 Current Current Annual Total Annual Proposed Annual Lease Rate Total Lease (Split Clause in Agreements SF Lease Annual Total Lease Increase (All Increase (Split 1/2 (Adjusted per 1/2 FY20 and 1/2 Only) Rate Lease (Adjusted per increase in FY20 and 1/2 FY25) Market Study) FY25) Market Study) FY20)
Lot 0830 0.189 $ 2,976.75 $ 0.27 $ 4,410.00 $ 1,433.25 $ 3,685.50 $ 708.75
Lot 0410 0.189 $ 326.59 $ 0.27 $ 483.84 $ 157.25 $ 404.25 $ 77.66
Lot 1140 0.189 $ 567.00 $ 0.27 $ 840.00 $ 273.00 $ 702.00 $ 135.00
Total Annual Increase $ 1,863.50 $ 921.41 Total Average Annual Increase $ 621.17 $ 307.14
Proposed Proposed Proposed SF Proposed Annual Full Utility Lots (0/5 Current Annual Total Annual Proposed Annual Current Lease Rate Total Lease (Split Clause in the Lease SF Lease Lease Increase (All Increase (Split 1/2 Annual Lease (Adjusted per 1/2 FY20 and 1/2 Agreements Only) Rate (Adjusted per increase in FY20 and 1/2 FY25) Market Study) FY25) Market Study) FY20)
Lot 2420 $ 0.269 $ 4,578.38 $ 0.35 $ 5,957.00 $ 1,378.62 $ 5,259.18 $ 680.80
Lot 0260 $ 0.269 $ 1,742.31 $ 0.35 $ 2,266.95 $ 524.64 $ 2,001.39 $ 259.08
Lot 2342 $ 0.269 $ 968.40 $ 0.35 $ 1,260.00 $ 291.60 $ 1,112.40 $ 144.00
Lot 2004 $ 0.269 $ 1,032.96 $ 0.35 $ 1,344.00 $ 311.04 $ 1,186.56 $ 153.60
Lot 2006 $ 0.269 $ 1,032.96 $ 0.35 $ 1,344.00 $ 311.04 $ 1,186.56 $ 153.60
Lot 2008 $ 0.269 $ 1,162.08 $ 0.35 $ 1,512.00 $ 349.92 $ 1,334.88 $ 172.80
Lot 2014 $ 0.269 $ 807.00 $ 0.35 $ 1,050.00 $ 243.00 $ 927.00 $ 120.00
Lot 2018 $ 0.269 $ 1,129.80 $ 0.35 $ 1,470.00 $ 340.20 $ 1,297.80 $ 168.00
Lot 2020 $ 0.269 $ 1,129.80 $ 0.35 $ 1,470.00 $ 340.20 $ 1,297.80 $ 168.00
Lot 2022 $ 0.269 $ 807.00 $ 0.35 $ 1,050.00 $ 243.00 $ 927.00 $ 120.00
Lot 2024 $ 0.269 $ 807.00 $ 0.35 $ 1,050.00 $ 243.00 $ 927.00 $ 120.00
Lot 2030 $ 0.269 $ 1,129.80 $ 0.35 $ 1,470.00 $ 340.20 $ 1,297.80 $ 168.00
Lot 2032 $ 0.269 $ 807.00 $ 0.35 $ 1,050.00 $ 243.00 $ 927.00 $ 120.00
Lot 2034 $ 0.269 $ 807.00 $ 0.35 $ 1,050.00 $ 243.00 $ 927.00 $ 120.00
Lot 2036 $ 0.269 $ 1,129.80 $ 0.35 $ 1,470.00 $ 340.20 $ 1,297.80 $ 168.00
Lot 2212 $ 0.269 $ 1,032.96 $ 0.35 $ 1,344.00 $ 311.04 $ 1,186.56 $ 153.60
Lot 2238 $ 0.269 $ 968.40 $ 0.35 $ 1,260.00 $ 291.60 $ 1,112.40 $ 144.00
Lot 2244 $ 0.269 $ 672.50 $ 0.35 $ 875.00 $ 202.50 $ 772.50 $ 100.00
Lot 2262 $ 0.269 $ 403.50 $ 0.35 $ 525.00 $ 121.50 $ 463.50 $ 60.00
Page 44 of 60 Lot 2264 $ 0.269 $ 403.50 $ 0.35 $ 525.00 $ 121.50 $ 463.50 $ 60.00
Lot 2265 $ 0.269 $ 403.50 $ 0.35 $ 525.00 $ 121.50 $ 463.50 $ 60.00
Lot 2267 $ 0.269 $ 403.50 $ 0.35 $ 525.00 $ 121.50 $ 463.50 $ 60.00
Lot 2332 $ 0.269 $ 807.00 $ 0.35 $ 1,050.00 $ 243.00 $ 927.00 $ 120.00
Lot 2336 $ 0.269 $ 807.00 $ 0.35 $ 1,050.00 $ 243.00 $ 927.00 $ 120.00
Lot 2338 $ 0.269 $ 968.40 $ 0.35 $ 1,260.00 $ 291.60 $ 1,112.40 $ 144.00
Lot 2346 $ 0.269 $ 403.50 $ 0.35 $ 525.00 $ 121.50 $ 463.50 $ 60.00
Lot 2348 $ 0.269 $ 371.22 $ 0.35 $ 483.00 $ 111.78 $ 426.42 $ 55.20
Lot 2356 $ 0.269 $ 403.50 $ 0.35 $ 525.00 $ 121.50 $ 463.50 $ 60.00
Lot 2357 $ 0.269 $ 403.50 $ 0.35 $ 525.00 $ 121.50 $ 463.50 $ 60.00
Lot 2358 $ 0.269 $ 807.00 $ 0.35 $ 1,050.00 $ 243.00 $ 927.00 $ 120.00
Lot 2374 $ 0.269 $ 968.40 $ 0.35 $ 1,260.00 $ 291.60 $ 1,112.40 $ 144.00
Lot 2376 $ 0.269 $ 968.40 $ 0.35 $ 1,260.00 $ 291.60 $ 1,112.40 $ 144.00
Lot 2384 $ 0.269 $ 968.40 $ 0.35 $ 1,260.00 $ 291.60 $ 1,112.40 $ 144.00
Lot 2386 $ 0.269 $ 968.40 $ 0.35 $ 1,260.00 $ 291.60 $ 1,112.40 $ 144.00
Total Annual Increase $ 9,697.08 $ 4,788.68
Page 45 of 60 Exhibit D
Nampa Municipal Airport Cost of Service and Equity Study
May 2020 Jacob Allen & Clair Bowman
“...help Nampa’s airport to be the best little airport it can be.” Page 46 of 60 - Mayor Kling Nampa Municipal Airport Cost of Service and Equity Study
Table of Contents INTRODUCTION 1 BACKGROUND 1 COST OF SERVICE OVERVIEW 2 STEP 1 – REVENUE AND EXPENSE CLASSIFICATIONS 3 Revenue: 3 Table 1: Revenue – Rate Class Groupings 3 Expense: 4 Table 2: Expense – Cost Classification Groupings 4 Figure 1: Percentage of Staff Time Allocations to Cost Classifications 5 Figure 2: Actual Expenses by Cost Classification 5 STEP 2: EXPENSE ALLOCATION 6 Table 3: Cost Assignment Basis by Cost Classification 6 Table 4: Data Elements for Rate Class Groupings 7 Table 5: Percent of Expense by Cost Classification 8 Table 5a: Example 8 Table 6: FY2018 Actual Expenses by Rate Class 9 Table 6a: Example 10 STEP 3: REVENUE 10 Table 7: FY2018 Actual Revenue by Rate Class 10 STEP 4: DETERMINING EQUITY 11 Table 8: FY2018 Revenue Versus Expense by Rate Class 11 Table 9: Current versus Equitable Rates by Rate Class 12 STEP 5: CONCLUSIONS 13
Glossary FAA The Federal Aviation Administration KMAN Official Federal Aviation Administration code for Nampa Municipal Airport
Page 47 of 60 i July 6, 2020 Nampa Municipal Airport Cost of Service and Equity Study
INTRODUCTION The Nampa Municipal Airport, known to FAA as KMAN, is a subdivision of the City of Nampa Public Works Department. KMAN dates its origin to the late 1920s when Nampa’s Chamber of Commerce purchased its initial parcel of ground. Its only runway remains substantially the same as when constructed in the mid-1970s. Official decision-making for airport-related matters and FAA compliance is done by the Nampa City Council and Mayor. A volunteer Airport Commission serves as a recommending body to the Council and Mayor. FAA documents show KMAN to be one of the top small airports in the country in meeting FAA’s goal for a fiscally sound operations and maintenance facility. This is an extraordinary accomplishment, one not to be forgotten in the context of this current effort. This Cost-of-Service (COS) analysis and report were requested by Mayor Debbie Kling and Public Works Director Tom Points on behalf of all City elected officials. The assignment posed two questions which are specifically addressed in Step 5: Conclusions: 1. Are fees, leases, and other revenue sources allocated equitably across all KMAN users? 2. Is KMAN on a sound, sustainable financial base? Preceding report sections have one overarching objective: Help readers understand analyses and decisions that guide answers to these questions. BACKGROUND KMAN, the Nampa Municipal Airport, is a complex organization. As with many other City government functional divisions, its public image is generally a simplified perspective that pays little heed to actual facilities and services. “They help people fly airplanes” or something comparable encapsulates many folks’ depth of understanding. Lost in this simplified perception are nuances reflected in the much broader array of actual functions such as, but not limited to: Operations; Safety; Hangars (both leased and City-owned); Financial Management; Long Range Planning, Facility Maintenance; and Administration. Volunteer Commissioners, appointed by the Mayor and confirmed by City Council to five-year terms, provide KMAN staff and program oversight as well as policy recommendations to the Mayor and Council. Commissioners are historically drawn from the primary user group – pilots – and have played a key role in long-term visioning. Commissioners, Mayors and City Council members change over time. These personnel changes create a potential for important policy, management, fiscal and other decisions to vary. Staff, in this context, do an extraordinary job of managing day-to-day operations, focusing especially on financial integrity, safety, property maintenance, FAA compliance and great personal relationships with Commission members and airport users. Council- approved budgets annually supplement KMAN revenue with general fund property tax revenues to backfill revenue shortfalls.
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Note: The following analysis focuses exclusively on airport expenses and does not include any plans, options, or financial implications for future capital expenditures. It is solely a revenue-expense analysis for KMAN and the first in a decade. Basic study data, Work Group decisions and analytical techniques beg, therefore, for periodic review and potential re-evaluation. COST OF SERVICE OVERVIEW A Cost of Service (COS) study is among the most basic of accounting tools. Its purpose is to explore expenditures for an organizational unit compared to its revenue, potentially raising questions of equity, fairness and fiscal sustainability. For a multi-faceted service organization such as KMAN, a COS includes both objective data paired with informed decision-making. Consider the following sampling of KMAN staff responsibilities: ▪ Maintain airport safety at or above levels acceptable to the FAA and City of Nampa; ▪ Negotiate and oversee ground leases; ▪ Negotiate and oversee City-owned facility rentals; ▪ Maintain runways, taxiways, city-owned hangars and the ground around privately-owned hangars; ▪ Set and/or enforce standards for Airport users such as those in KMAN’s Council-adopted Rules and Regulations; ▪ Implement the Airport Master Plan; ▪ Keep customers, City officials, and the FAA informed, involved and feeling good about how the Airport is managed; ▪ Manage finances within budget and in a manner to facilitate a clean annual audit; and ▪ Report intelligently and wisely to a Commission, Public Works Deputy Director, and Mayor. Staff expend variable amounts of resources on these tasks. Each one implies a somewhat unique class of Airport users, such as renters of City-owned hangars, owners of hangars on property leased to them by the City; itinerant pilots; the Fixed Base Operator, Warhawk, etc. None, however, make use of nor require benefit from all Airport services. Thus, a COS must identify historic costs of providing services and benefits to each rate-paying class as a function of its utilization of Airport resources and the revenue it generates. Quantifying historic costs associated with each of KMAN’s revenue sources is a means to an end for several matters. First, it identifies any weakness in City Council’s annual pledge to FAA and affirmed in the Airport Master Plan that KMAN is “as self-sustaining as possible” (FAA Order 5190.6b). Second, it sheds light on the complicated and contractually fragmented revenue stream into Airport coffers. Third, it provides a basis to establish more equitable rates to be paid by each class of users. Fourth, it may become a foundation on which to establish more consistent Council-driven policies: lessening, for example, variability in how fees for user groups have been treated differentially over time. Lastly, and perhaps most importantly, it may greatly assist the City in guaranteeing that KMAN can admirably serve future airport users - in Mayor Kling’s words, “help Nampa’s airport to be the best little airport it can be.” Public Works’ Business Manager, Jacob Allen, was assigned to lead this effort. He assembled a Cost of Service Study Work Group (“Work Group”) to support him: ▪ Jacob Allen, Business Manager and chair ▪ Jeffrey Barnes, Deputy Public Works Director, Transportation ▪ Monte Hasl, Superintendent, Nampa Municipal Airport ▪ Lynsey Johnson, Administrative Coordinator, Nampa Municipal Airport ▪ Douglas Waterman, Legal Counsel (Hamilton, Michaelson and Hilty, LLP) ▪ Clair Bowman, Senior Transportation Planner
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The Work Group served as a sounding board for Mr. Allen’s work and as a resource to draw upon for overall guidance, data, and ideas. Through 2019 and early 2020, the Work Group focused on these tasks: 1. Identify a limited number of revenue rate classes as a basis for revenue analysis. 2. Identify a limited number of cost classifications as a basis for expense analysis. 3. Assemble all locally funded expenses attributed to KMAN over three recent fiscal years; calculate an average expense baseline for each cost classification during that time. 4. Calculate, for each rate class, its actual utilization of KMAN expenses. 5. Calculate, for each rate class, its actual revenue to KMAN. 6. Compare, for each class of rate payers, its expense allocation to its actual KMAN revenue. 7. Offer a profile of equitable rates for all rate classes. STEP 1 – REVENUE AND EXPENSE CLASSIFICATIONS Revenue: Revenue into the Airport comes from nearly a hundred sources made up of fees, lease payments, rental rates, fuel, etc. Charges for these consist of at least two dozen unique rates. Each source for each rate, of course, requires separate tracking by Airport staff. Subtle differences among several led the Work Group to limit Rate Class groupings to fifteen. Table 1 names these groupings and provides brief descriptions of each.
Table 1: Revenue – Rate Class Groupings RATE CLASSES DEFINITION
Café The Café operator leases space in the City-owned Terminal Building.
The Civil Air Patrol – an official auxiliary of the United States Air Force – qualifies for a Civil Air Patrol (CAP) reduced lease rate to a limited extent per FAA Revenue Use Policy. **
The Fixed Base Operator leases space in the City-owned Terminal Building to provide Fixed Base Operator (FBO) aeronautical services such as fueling, rental, maintenance, instruction, etc.
This is a large T- shaped hangar. One arm of the T is slightly wider than the other – Oversized Standard T-Hangars larger than a standard T hangar and smaller than a twin T hangar. Building 0520; spaces 1 and 6.
T-shaped hangar space. 41’ wide at the door and 32’ - 34’ deep. Door height is 10’. Standard T-Hangars Buildings 0310; 0320; 0330; 0340; 0510; 0520; 0530; 0550; 0810; 0820
An End T-Hangar space (one-half of a T-Hangar). End spaces are located at each end End T-Hangars of a standard T-hangar building. Aircraft that can fold wings or have less than a 20’ wingspan will fit in these spaces. Each space is L-shaped.
Older Hangars with structural deficiencies. Buildings 0210; 0220; 0230; 0240; 0250; 0450; 0540. Hangars 0210 through 0250 are four-place cinder block hangars. Hangars Pre 1990 T-Hangars 0450 and 0540 were constructed by a private party in the 1980s and reverted to City ownership. Conditions and rents are sufficiently alike to group them as a single rate group. 41’ wide at the door and 32’ deep. Door height is 10’.
These are land leases executed on the west side of the airport. The lessee only has Land Lease - Electrical Only access to electricity. No other utilities are available to the lessee. Lease rates were set at the time each lease was signed with only one option for increases: annual CPI.
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RATE CLASSES DEFINITION
This rate class applies only to Nampa City Fire Station #5 and the National Guard. Lease rates are established by appraisal and should be updated at least every five Land Lease - Non-Aviation years to ensure Fair Market Lease rate meets FAA Revenue Use Policy. Per FAA Order 5190.6B the non-aviation rate may not be set by Cost of Service but by Fair Market Appraisal.
These are 20-year land leases executed in 2012 and after. A new lease rate was Land Lease - Standard Rate adopted. Leases allow for two rate adjustments: Annual CPI, and “market adjustments” in calendar years ending on 5 or 0.
Shade hangars are simply covered outdoor parking spots, like a carport with just a roof Shade Hangars and no walls. Power is not available.
Tie Downs are outdoor parking spaces with no amenities other than in-pavement hooks Tie Downs to which an aircraft is secured.
One-half of a Twin T-Hangar. Aircraft that can fold wings or have less than a 22’ Twin End T-Hangars wingspan will fit in these L-shaped spaces.
Hangar space that is T shaped and larger than a standard T-Hangar – designed to Twin T-Hangars accommodate twin engine aircraft. 44’ wide at the door and 37’ deep with a 14’ tall door.
The Warhawk Air Museum has a minimal-fee land lease, qualifying for a reduced rental Warhawk rate per FAA Revenue Use Policy. **
** FAA Order 5190.6B
Expense: Expenses were grouped into five Cost Classifications reviewed and approved by the Work Group. Labels were assigned in a manner to distinguish air-related functions from non-air functions. Table 2 names the Cost Classifications and provides a brief description of each.
Table 2: Expense – Cost Classification Groupings COST CLASSIFICATION GROUPING DESCRIPTION These are essential aspects of the airport used by virtually all airport activities: 1 Air – Aircraft Operations Area Runway, Taxiways, Taxi Lane, Fuel Island, Administrative Offices, and Terminal Building. These are buildings around the airport that serve primary airport functionality: 2 Air – Buildings Hangars. It includes only City-owned hangars that are rented to tenants. This classification includes all Ground Maintenance areas around the entire 3 Air – Ground Maintenance airfield. These are Non-Air related aspects of the airport: Fire Station, National Guard, 4 Non-Air – Buildings Warhawk and Civil Air Patrol. Administration includes salary and overhead costs not related to one of the 5 Administration previous four Cost Classifications.
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The Work Group collected and examined three years of actual expenses from fiscal years 2016, 2017 and 2018. City General Ledger codes were matched to the first four of these. However, General Ledger codes for personnel and office expense could not be objectively assigned to them. KMAN personnel self-reported proportions of their annual time spent in each Cost Classification. Figure 1 shows how personnel and office expenses, derived from KMAN staff’s self-reported time allocations, were distributed across Cost Classifications.
Figure 1: Percentage of Staff Time Allocations to Cost Classifications
Aircraft Operations Area
Air-Buildings
Air-Ground
Non-Air-Buildings
Administration
1 2 3 4 5
Salar es Overtime Re a r F el
Figure 2 shows total expenses including personnel costs allocated to each Cost Classification by fiscal year and an average across the three years. Fiscal year actual expenses ranged from a low of $312,000 to a high of $334,000 with the average being $320,940.
Figure 2: Actual Expenses by Cost Classification
1
14
12
1
4
2
Aircraft Operations Aircraft-Buildings Aircraft-Ground Non-Aircraft Administration Area Buildings
FY2 1 FY2 1 FY2 1 Average
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Work Group members reviewed these data and unanimously endorsed Averages in Figure 2 as the correct basis to proceed. In short, their values make sense. Administrative costs are the largest single expense in the Airport’s locally funded budget and remain so in Figure 2 even after reallocation of staff time. Airport operations is second largest, addressing a large majority of the Airport grounds. Similar explanations apply to buildings and grounds. STEP 2: EXPENSE ALLOCATION Assessing equability for each revenue payer necessitates spreading its payments in a justifiable manner among Cost Classifications. Three data elements accomplish this process. 1. Number of hours of KMAN staff time, expressed as a percent of total hours 2. Number of hangars 3. Square footage Staff time hours were, as noted earlier, assigned based on staff’s self-reported time allocation. Objective data were readily available for number of hangars and square footage. These were assigned to Cost Classifications as shown in Table 3.
Table 3: Cost Assignment Basis by Cost Classification COST CLASSIFICATIONS** ASSIGNMENT BASIS
Air – Aircraft Operations Area Square footage
Air – Buildings Number of hangars***
Air – Ground Maintenance Square footage***
Non-Air – Buildings Percent of staff time
Administration Square footage
** See Table 2 for more complete descriptions *** Future analyses may want to re-consider these assignments.
Assignments in Table 3 are, for the most part, intuitive. The only metric that “works” for the Aircraft Operations Cost Classification, which includes all essential aspects of the airport used by virtually all airport activities, is square footage. Number of hangars (Air – Buildings) fits similarly - hangars do differ in size from one another, but a common element is how many hangars exist. Ground Maintenance is best measured as the number of square feet staff must maintain. Staff time is the only expense for Non-Air Buildings – Café, Civil Air Patrol, National Guard and Warhawk; square footage and number of hangars are immaterial for this classification. And lastly, the appropriate way to spread administrative overhead is across the entire airport; square footage is the correct metric. KMAN staff counted and calculated these data elements for each Rate Class. Data elements were then converted into a percentage across Rate Classes. These data, presented in Table 4, are accurate as of October 1, 2019.
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Table 4: Data Elements for Rate Class Groupings # OF ANNUAL SQUARE % OF % OF % OF SQUARE RATE CLASSES HANGARS STAFF HOURS FOOTAGE HANGARS TIME FOOTAGE
Café 0 20.0 1,634 0.0% 9.4% 0.1%
Civil Air Patrol (CAP) 0 3.7 15,963 0.0% 1.7% 1.2%
End T-Hangars 11 0.0 6,643 7.0% 0.0% 0.5%
Fixed Base Operator (FBO) 0 106.7 2,185 0.0% 49.9% 0.2%
Land Lease - Electrical Only 0 0.0 141,711 0.0% 0.0% 10.8%
Land Lease - Non-Aviation 0 0.0 118,265 0.0% 0.0% 9.0%
Land Lease - Standard Rate 0 0.0 730,561 0.0% 0.0% 55.9%
Oversized Standard T-Hangars 2 0.0 2,236 1.3% 0.0% 0.2%
Pre 1990 T-Hangars 46 0.0 45,109 29.3% 0.0% 3.5%
Shade Hangars 15 0.0 37,457 9.6% 0.0% 2.9%
Standard T-Hangars 76 0.0 73,717 48.4% 0.0% 5.6%
Tie Downs 0 0.0 16,800 0.0% 0.0% 1.3%
Twin End T-Hangars 2 0.0 1,119 1.3% 0.0% 0.1%
Twin T-Hangars 5 0.0 5,995 3.2% 0.0% 0.5%
Warhawk 0 83.3 107,596 0.0% 39.0% 8.2%
Totals 157 213.7 1,306,991 100.0% 100.0% 100.0% Cross-tabulating Cost Classifications by Rate Classes, shown in Table 5, establishes the expense side basis for determining equitability.
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Table 5: Percent of Expense by Cost Classification COST CLASSIFICATIONS AIR - AIR - AIR - GROUND NON-AIR - AIRCRAFT ADMIN. RATE CLASSES BUILDINGS (# MAINTENANCE BUILDINGS (% TOTAL OPERATIONS (SQ. FT.) OF HANGARS) (SQ. FT.) STAFF TIME) AREA (SQ. FT.)
Café 4.2% 0.0% 1.5% 90.9% 3.4% 100%
Civil Air Patrol (CAP) 39.1% 0.0% 13.5% 15.8% 31.7% 100%
End T-Hangars 9.6% 79.4% 3.3% 0.0% 7.7% 100%
Fixed Base Operator (FBO) 1.1% 0.0% 0.4% 97.5% 0.9% 100%
Land Lease - Electrical Only 46.4% 0.0% 16.0% 0.0% 37.6% 100%
Land Lease - Non-Aviation 46.4% 0.0% 16.0% 0.0% 37.6% 100%
Land Lease - Standard Rate 46.4% 0.0% 16.0% 0.0% 37.6% 100%
Oversized Standard 15.1% 67.6% 5.2% 0.0% 12.2% 100% T-Hangars
Pre 1990 T-Hangars 13.8% 70.4% 4.7% 0.0% 11.1% 100%
Shade Hangars 24.0% 48.2% 8.3% 0.0% 19.4% 100%
Standard T-Hangars 13.6% 70.6% 4.7% 0.0% 11.1% 100%
Tie Downs 46.4% 0.0% 16.0% 0.0% 37.6% 100%
Twin End T-Hangars 9.0% 80.6% 3.1% 0.0% 7.3% 100%
Twin T-Hangars 15.8% 66.0% 5.4% 0.0% 12.8% 100%
Warhawk 28.5% 0.0% 9.8% 38.7% 23.1% 100%
To interpret Table 5, consider the Rate Class Land Lease – Standard Rate as an example. Its total utilization of KMAN staff and direct expenses is spread across three of the five Cost Classifications as shown in Table 5a:
Table 5a: Example AIR - AIR - AIR - GROUND NON-AIR - AIRCRAFT ADMIN. RATE CLASSES BUILDINGS (# MAINTENANCE BUILDINGS (% TOTAL OPERATIONS (SQ. FT.) OF HANGARS) (SQ. FT.) STAFF TIME) AREA (SQ. FT.)
Land Lease - Standard Rate 46.4% 0.0% 16.0% 0.0% 37.6% 100%
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In other words, approximately half of these hangars’ annual utilization of the airport is attributable to their square footage of the general Aircraft Operations Area. Another smaller portion (16%) is due to their share of grounds maintenance. The remainder consists of administrative time and funds expended on their behalf. The same interpretive path is used to understand remaining Rate Classes’ utilization of KMAN expenses and staff time in Table 5. Table 6 next applies percentages from Table 5 to total KMAN costs for FY2018. Values in the Total Expenses column of Table 6, therefore, show the total value of KMAN staff time and out-of-pocket expenses that were utilized by each Rate Class.
Table 6: FY2018 Actual Expenses by Rate Class AIR - AIR - NON-AIR - TOTAL RATE CLASSES AIRCRAFT AIR - GROUND ADMIN BUILDINGS BUILDING EXPENSES OPERATIONS Café $244 $0 $84 $5,229 $197 $5,754
Civil Air Patrol (CAP) $2,380 $0 $821 $959 $1,927 $6,088
End T-Hangars $990 $8,228 $342 $0 $802 $10,362
Fixed Base Operator (FBO) $326 $0 $112 $27,888 $264 $28,590
Land Lease - Electrical Only $21,129 $0 $7,290 $0 $17,109 $45,529
Land Lease - Non-Aviation $17,633 $0 $6,084 $0 $14,279 $37,996
Land Lease - Standard Rate $108,926 $0 $37,584 $0 $88,203 $234,714
Oversized Standard $333 $1,496 $115 $0 $270 $2,214 T-Hangars
Pre 1990 T-Hangars $6,726 $34,406 $2,321 $0 $5,446 $48,899
Shade Hangars $5,585 $11,219 $1,927 $0 $4,522 $23,254
Standard T-Hangars $10,991 $56,845 $3,792 $0 $8,900 $80,528
Tie Downs $2,505 $0 $864 $0 $2,028 $5,397
Twin End T-Hangars $167 $1,496 $58 $0 $135 $1,855
Twin T-Hangars $894 $3,740 $308 $0 $724 $5,666
Warhawk $16,043 $0 $5,535 $21,786 $12,990 $56,354 Totals $194,872 $117,429 $67,240 $55,862 $157,797 $593,200 To illustrate, here are rows from Table 5 and Table 6 for the Rate Class Land Lease – Standard Rate. Its square footage basis for cost allocation to Air – Aircraft Operations is 46.4% of its impact on total KMAN operations, representing $108,926 of actual FY2018 expenses. Its 16% of Air – Ground translated to $37,584 actual expenses. And its 37.6% of Administration (staff time) amounted to $88,203. Therefore, $234,714 is the full cost of these hangars based on actual FY2018 expenses.
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Table 6a: Example AIR - AIR - NON-AIR - TOTAL RATE CLASSES AIRCRAFT AIR - GROUND ADMIN BUILDINGS BUILDING EXPENSES OPERATIONS
46.4% 0.0% 16.0% 0.0% 37.6% 100.0% Land Lease - Standard Rate $108,926 $0 $37,584 $0 $88,203 $234,714 STEP 3: REVENUE FY 2018 revenue is easily determined from the City’s General Ledger accounts. Table 7 lists total revenue from each Rate Class accompanied by its total revenue per square foot.
Table 7: FY2018 Actual Revenue by Rate Class FY2018 REVENUE RATE CLASSES TOTAL PROPERTY TAXES PROPERTY TAXES PER SQUARE REVENUE PAID TO CITY* PAID TO COUNTY FOOT / YEAR
Café $12,000 $7.34
Civil Air Patrol (CAP) $1 < 1 cent
End T-Hangars $8,440 $1.15
Fixed Base Operator (FBO) $16,223 $7.42
Land Lease - Electrical Only $26,075 $17,415 $22,330 $0.84*
Land Lease - Non-Aviation $29,851 $0.71
Land Lease - Standard Rate $75,412 $89,778 $115,116 $0.71*
Oversized Standard T-Hangars $4,700 $2.10
Pre 1990 T-Hangars $57,860 $1.28
Shade Hangars $21,000 $0.56
Standard T-Hangars $156,100 $2.33
Tie Downs $1,600 $0.03
Twin End T-Hangars $1,944 $1.74
Twin T-Hangars $11,000 $1.83
Warhawk $1 < 1 cent
Total $422,207 $107,193 $132,446
* Does not include property taxes paid to City of Nampa or Canton County
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STEP 4: DETERMINING EQUITY The most basic form of equity determination compares actual expenses from Table 6 with actual revenue from Table 7. This comparison is shown in Table 8 supplemented by interpretive calculations.
Table 8: FY2018 Revenue Versus Expense by Rate Class* % OF EXPENSE RATE CLASSES REVENUE ** EXPENSE DIFFERENCE COLLECTED
Café $12,000 $5,754 $6,246 208.6%
Civil Air Patrol (CAP) $1 $6,088 ($6,087) 0.0%
End T-Hangars $8,440 $10,362 ($1,922) 81.5%
Fixed Base Operator (FBO) $16,223 $28,590 ($12,367) 56.7%
Land Lease - Electrical Only $26,075 $45,529 ($19,454) 57.3%
Land Lease - Non-Aviation $29,851 $37,996 ($8,145) 78.6%
Land Lease - Standard Rate $75,412 $234,714 ($159,302) 32.1%
Oversized Standard T-Hangars $4,700 $2,214 $2,486 212.3%
Pre 1990 T-Hangars $57,860 $48,899 $8,961 118.3%
Shade Hangars $21,000 $23,254 ($2,254) 90.3%
Standard T-Hangars $156,100 $80,528 $75,572 193.8%
Tie Downs $1,600 $5,397 ($3,797) 29.6%
Twin End T-Hangars $1,944 $1,855 $89 104.8%
Twin T-Hangars $11,000 $5,666 $5,334 194.1%
Warhawk $1 $56,354 ($56,353) 0.0%
Totals $422,207 $593,200 ($170,993) 71.2%
* $1/year leases were pre-COS commitments approved by City Council. ** Does not include property taxes paid to City of Nampa
Gross annual expense differences in Table 8 paint a broad picture of KMAN’s current revenue streams versus actual expenditures. In the event Mayor and Council elect to press for greater equity, KMAN staff need detailed numbers to insert into leases, rental agreements and the like. Table 9 provides this level of detail.
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Table 9: Current versus Equitable Rates by Rate Class EQUITABLE RATE CLASSES RATE BASIS CURRENT RATE % CHANGE RATE *
Café Yearly per Square Foot $7.34 $3.52 -52.0%
Civil Air Patrol (CAP) Yearly per Square Foot $0.00 $2.62 > 1,000%
End T-Hangars Monthly per Hangar $72.00 $88.39 22.8%
Fixed Base Operator (FBO) Yearly per Square Foot $7.42 $13.08 76.3%
Land Lease - Electrical Only Yearly per Square Foot $0.19 $0.33** 73.7%
Land Lease - Non-Aviation Yearly per Square Foot $0.33 $0.42 27.3%
Land Lease - Standard Rate Yearly per Square Foot $0.27 $0.38** 40.7%
Oversized Standard T-Hangars Monthly per Hangar $202.00 $95.17 -52.9%
Pre 1990 T-Hangars Monthly per Hangar $123.00 $103.95 -15.5%
Shade Hangars Monthly per Hangar $92.00 $101.87 10.7%
Standard T-Hangars Monthly per Hangar $183.00 $94.41 -48.4%
Tie Downs Monthly per Hangar $20.00 $67.47 237.4%
Twin End T-Hangars Monthly per Hangar $83.00 $79.22 -4.6%
Twin T-Hangars Monthly per Hangar $238.00 $122.59 -48.5%
Warhawk Yearly per Square Foot $0.00 $1.91 > 1,000%
* These rates are equitable, but do not necessarily reflect rates that will be recommended to Council. Projected Rate Increases for ** Does not include property taxes paid to City of Nampa Equitability
Examining rates in Table 9 reveals an anomaly when “Equity” is defined solely based on calculations, albeit really good calculations. Consider the Equitable Rate for Shade Hangars: $101.87 monthly per hangar. Shade hangars are not enclosed (See description in Table 1). Nevertheless, this calculated rate is higher than enclosed hangars such as Standard T-Hangars and Twin End T-Hangars; and it is only slightly less than the Equitable Rate for Oversized Standard T-Hangars. The Work Group recognized that such differences are not likely to be supported going forward; efforts have already begun to consider supplementing these calculations with something like “market rates” for hangar spaces charged by other airports situated similarly in size, geography and take-offs and landings.
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STEP 5: CONCLUSIONS This COS was, as noted earlier, conducted at the request of the Mayor and Public Works Director. Most of its un- derlying data were drawn from audited financial records of the City of Nampa. Audited data were not available to allocate staff time and overhead costs to Cost Classifications; the Work Group addressed these limitations in unani- mously approved workarounds. Thus, it is now reasonable to respond to the Mayor’s two focus questions:
1. Are fees, leases, and other revenue sources allocated equitably across all KMAN users? Conclusion: Clearly not. The Café, Oversized T-Hangars and Twin T-Hangars generate about twice as much revenue as they consume of KMAN’s expense budget. Revenue from four other rate classes reimburses less than 50% of expenditures on their behalf. Each of the fifteen rate classes, including these seven, seems to be somewhat unique from all others.
2. Is the Nampa Municipal Airport (KMAN) on a sound, sustainable financial base? Conclusion: There is room for improvement. The negative difference of $170,993 between FY2019 annual revenue and FY2017-FY2019 average annual expense is currently managed by an annual injection of City general fund property taxes, leaving sustainability as a somewhat dynamic condition that can change at the behest of Council or changing economic conditions for the City as a whole.
Multiple discussions with the Airport Commission warrant three additional comments as follow-up to these conclusions: 3. Importance of Property Taxes: Owners of private hangars on Airport property are assessed personal property taxes on their hangars. A Council Resolution pledging the City portion of these property taxes to the Airport budget would be a resounding affirmation of Council’s support for the Airport Explanation: This comment comes directly from the Airport Commission. As noted above, significant annual injection of City general fund property tax is necessary to bridge the negative difference between revenue and expenses. The 2020 Idaho Airport System Plan identifies $106 Million in benefits to SW Idaho from the Airport. A formal pledge to return owners’ Nampa property taxes to enhance the Airport’s expense budget promotes both equity and sustainability.
4. Cost of Service Study as a Guide: Explanation: This COS is a snapshot for one point in time, a document to be used as a reference to evaluate equity and adjust lease rates accordingly in the short term. Both its proposed use and data on which it is based are, however, dynamic, necessitating periodic updates to remain useful.
5. Conservative Character of Proposed Lease Rates: Explanation: Proposed rates do not include any allowance for capital expansion or periodic City-funded maintenance. Updating or re-building the terminal building, for example, would likely increase Equitable Rates in Table 9 substantially.
Page 60 of 60 13 July 6, 2020 Supplemental information provided at 10.07.2020 BOA Meeting
October 7, 2020 Agenda
1. Introduction 2. Timeline 3. Cost of Service Overview 4. Cost of Service Steps 5. Rate Proposal 6. Rate Comparisons Airport Leadership
• Airport Commission • Vision, budget, leadership & recommendations to Council • Airport Staff • Operations, financial integrity, safety, FAA compliance • Council • Budget including general fund dollars to supplement airport revenue, lease/rental terms, rates Timeline
Oct. 2018 — Mayor & PW Director request staff complete business plan May 2020 — Cost of Service Study (COS) presented to Mayor, Commissioners & City Councilors
COS focused on two questions: 1. Are fees, leases, and other revenue sources allocated equitably across all users? 2. Is the airport on a sound, sustainable financial base? Timeline
June 2020—To Airport Commission August 2020 – City Council as a Staff Report August, September 2020 – Rate adjustments proposed to Airport Commissioners from COS Oct. 2020—Board of Appraisers
Next steps if recommended • Airport Commission vote on 10/12/20 • Public hearing and Council decision to adjust rates Cost of Service Overview
What it is a COS Study: • Ensures rates are tied to costs • Ties to rate projections • Analyzes historical expenses and projects future cash flow needs • Breaks up costs based on classified systems • Ex: domestic water usage, storage, fire flow, disinfection • Promotes rate equity • Those that use it, pay for it • Define each rate class used in the Step 1: Rate cost of service study Classes • Consolidated from 23 classes to 15
Rate Classes Definition Café The Café operator leases space in the City-owned Terminal Building. Civil Air Patrol (CAP) The Civil Air Patrol – an official auxiliary of the United States Air Force.** Fixed Base Operator (FBO) Leases space in the terminal to provide aeronautical services such as fueling, rental, maintenance, instruction, etc. This is a large T- shaped hangar. One arm of the T is slightly wider than the other – larger than a standard T hangar and smaller Oversized Standard T-Hangars than a twin T hangar. Standard T-Hangars T-shaped hangar space. End T-Hangars An End T-Hangar space (one-half of a T-Hangar). Pre 1990 T-Hangars Older Hangars with structural deficiencies. Conditions are sufficiently alike to group them as a single rate group. Land Lease - Electrical Only These are land leases executed on the west side of the airport. The lessee only has access to electricity. Per FAA Order 5190.6B the non-aviation rate may not be set by Cost of Service but by Fair Market Appraisal. Appraised every 5 Land Lease - Non-Aviation years. (Fire Station, National Guard) Land Lease - Standard Rate Privately built and owned hangars with access to utilities. Shade Hangars Shade hangars are simply covered outdoor parking spots. Tie Downs Outdoor parking spaces with no amenities other than in-pavement hooks to which an aircraft is secured. Twin End T-Hangars One-half of a Twin T-Hangar. Twin T-Hangars Larger than standard T-hangar. Designed to accommodate twin engine aircraft. Warhawk The Warhawk Air Museum has a minimal-fee land lease.**
** FAA Order 5190.6B Step 2: Cost • Define airport cost classification groupings Classification • Each bucket, or classification group, distinguishes specific airport Grouping functions • Costs need spread to each rate payer in an equitable and Step 3: Cost justified manner • Each cost classification assigned an allocation basis or metric Classification used to compare Allocation • Allocation basis applied to the proportionate share for each rate class
Aircraft Operations Area – Runway, taxiway, terminal, fuel, etc.
Air Buildings – City owned hangars
Ground Maintenance – Airport perimeter
Non-Air Buildings – Guard, fire station
Administration – Overhead Step 4: Allocate (Total Expense x Exp Classification %) x Rate Class % = $ Total Expense to Equitable Amount per Rate Class Rate Class Step 5: Analyze • Gathered actual revenues for each Rate Class rate class for FY18 • For comparisons, compared revenues Revenues to the total sq. ft. each class occupies Step 6: • Analyze the revenue compared to the expense for each rate class Determining • The expenses, per the study, determine each rate classes equitable Equity share
• Civil Air Patrol and Warhawk each pay $1 annually per lease agreements with the City • Currently being subsidized by property taxes Conclusions
The Nampa Municipal Airport is recognized as one of the top small airports in the country in meeting Federal Aviation Administration’s (FAA) goal for a fiscally sound operations and maintenance facility.
1. Are fees, leases, and other revenue sources allocated equitably across all users? • Rate adjustments recommended 2. Is the airport on a sound, sustainable financial base? • W/good leadership, the Airport continues to run a safe, efficient and well-maintained airport. • $170,993 difference between revenue and expenses bridged by property tax infusion • Lease and rent rates support operations and maintenance only, no capital expansion Step 7: Equitable • Compare current rate being charged • Calculate the rate change needed to Rate Analysis equal equitable share of expenses
Key Assumptions: Tie downs included only 5 of 15 available spots as well as the decrease in square footage Land Lease – Standard Rate sq. footage was maximized to total build-out of current available space to minimize the rate as the building area will require no additional City expense Shade Hangars were decreased as they take much less maintenance than other hangars Rates do not encompass “market” rates, only the rates to provide revenues to cover each classes equitable share of the airport expense Current model does not include capital Model shows rates at current point in time Model establishes a “self-sustainable airport; covers operations and includes no property taxes
Rate required for equitability Revisions Based on Commission Comments
• Credited Land Lease holders City property tax dollar payments in financial model
• Reduced land lease standard rate increase from $.38 to $.35 based on based on market comparison data and Land Lease holder property tax credit. City of Boise is $.38.
• Reduced land lease electrical only rate from $.33 to $.27 based on comparison to lots with access to water and sewer, market comparison data and Land Lease holder property tax credit.
• For existing land lease holders, propose rates increase half in fiscal year 2020 and the remainder in fiscal year 2025 (based on the 0 and 5 clause in the lease agreements). This provides an incremental increase for leaseholders. Rate Proposals
5 Year Phase-In
Total increase broken into 5 equal yearly increases
½ increase in 2020, CPI each year following until 2025 when the remaining gap will be increased
Rate includes property taxes paid to the City less what is allocated to Public Safety Land Lease – Standard Market Comparison
BASED LANDINGS/ RUNWAY AIRPORT OWNER NPIAS CLASS AIRCRAFT TAKEOFFS LENGTH (ft.) LEASE RATE Stevens Field Airport (CO) County General Aviation 40 13,250 8,100 0.48 Evanston-Uinta County Airport (WY) Joint General Aviation 14 5,512 7,300 0.44 Primary Small- Boise Airport (ID) City 269 137,240 10,000 – 9,763 0.38 Hub Nampa Municipal Airport (ID) City General Aviation 270 90,000 5,000 .27/.35 Heber Valley Airport (UT) City General Aviation 50 21,900 6,898 0.35 McCall Municipal Airport (ID) City General Aviation 74 43,435 6,108 0.30 Ogden-Hinckley Airport (UT) City Primary Non-Hub 241 113,515 8,107 - 5,195 0.24 Arlington Municipal Airport (WA) City General Aviation 261 67,160 5,332 - 3,498 0.24 Non-Primary Caldwell Industrial Airport (ID) City 399 147,095 5,500 - 1,676 0.21 Reliever Cedar City Regional Airport (UT) City Primary Non-Hub 78 96,360 8,650 - 4,822 0.20 Average lease & rent adjustments
Land Lease w Full Utilities ($.27 to $.35) Average increase $285/year or $23/mo. Split ½ FY20, ½ FY25 average increase $140/year, $12/mo.
City Owned Rental Rates Average increase $36/year or $3/mo. Land lease actual cost increases
Proposed Proposed SF Proposed Annual Proposed Annual Annual Proposed Annual Electrical Only Lots (0/5 Current SF Current Annual Lease Rate Total Lease Total Lease (Split Increase (All Increase (Split 1/2 Clause in Agreements Only) Lease Rate Total Lease (Adjusted per (Adjusted per 1/2 FY20 and 1/2 increase in FY20 and 1/2 FY25) Market Study) Market Study) FY25) FY20)
Lot 0830 0.189 $ 2,976.75 $ 0.27 $ 4,410.00 $ 1,433.25 $ 3,685.50 $ 708.75
Lot 0410 0.189 $ 326.59 $ 0.27 $ 483.84 $ 157.25 $ 404.25 $ 77.66
Lot 1140 0.189 $ 567.00 $ 0.27 $ 840.00 $ 273.00 $ 702.00 $ 135.00
Total Annual Increase $ 1,863.50 $ 921.41 Total Average Annual Increase $ 621.17 $ 307.14
Proposed Proposed SF Proposed Annual Proposed Annual Full Utility Lots (0/5 Clause Annual Proposed Annual Current SF Current Annual Lease Rate Total Lease Total Lease (Split in the Lease Agreements Increase (All Increase (Split 1/2 Lease Rate Lease (Adjusted per (Adjusted per 1/2 FY20 and 1/2 Only) increase in FY20 and 1/2 FY25) Market Study) Market Study) FY25) FY20)
Lot 2420 $ 0.269 $ 4,578.38 $ 0.35 $ 5,957.00 $ 1,378.62 $ 5,259.18 $ 680.80
Lot 0260 $ 0.269 $ 1,742.31 $ 0.35 $ 2,266.95 $ 524.64 $ 2,001.39 $ 259.08
Lot 2342 $ 0.269 $ 968.40 $ 0.35 $ 1,260.00 $ 291.60 $ 1,112.40 $ 144.00
Lot 2004 $ 0.269 $ 1,032.96 $ 0.35 $ 1,344.00 $ 311.04 $ 1,186.56 $ 153.60
Lot 2006 $ 0.269 $ 1,032.96 $ 0.35 $ 1,344.00 $ 311.04 $ 1,186.56 $ 153.60
Lot 2008 $ 0.269 $ 1,162.08 $ 0.35 $ 1,512.00 $ 349.92 $ 1,334.88 $ 172.80 Land lease actual cost increases
Lot 2014 $ 0.269 $ 807.00 $ 0.35 $ 1,050.00 $ 243.00 $ 927.00 $ 120.00
Lot 2018 $ 0.269 $ 1,129.80 $ 0.35 $ 1,470.00 $ 340.20 $ 1,297.80 $ 168.00
Lot 2020 $ 0.269 $ 1,129.80 $ 0.35 $ 1,470.00 $ 340.20 $ 1,297.80 $ 168.00
Lot 2022 $ 0.269 $ 807.00 $ 0.35 $ 1,050.00 $ 243.00 $ 927.00 $ 120.00
Lot 2024 $ 0.269 $ 807.00 $ 0.35 $ 1,050.00 $ 243.00 $ 927.00 $ 120.00
Lot 2030 $ 0.269 $ 1,129.80 $ 0.35 $ 1,470.00 $ 340.20 $ 1,297.80 $ 168.00
Lot 2032 $ 0.269 $ 807.00 $ 0.35 $ 1,050.00 $ 243.00 $ 927.00 $ 120.00
Lot 2034 $ 0.269 $ 807.00 $ 0.35 $ 1,050.00 $ 243.00 $ 927.00 $ 120.00
Lot 2036 $ 0.269 $ 1,129.80 $ 0.35 $ 1,470.00 $ 340.20 $ 1,297.80 $ 168.00
Lot 2212 $ 0.269 $ 1,032.96 $ 0.35 $ 1,344.00 $ 311.04 $ 1,186.56 $ 153.60
Lot 2238 $ 0.269 $ 968.40 $ 0.35 $ 1,260.00 $ 291.60 $ 1,112.40 $ 144.00
Lot 2244 $ 0.269 $ 672.50 $ 0.35 $ 875.00 $ 202.50 $ 772.50 $ 100.00
Lot 2262 $ 0.269 $ 403.50 $ 0.35 $ 525.00 $ 121.50 $ 463.50 $ 60.00
Lot 2264 $ 0.269 $ 403.50 $ 0.35 $ 525.00 $ 121.50 $ 463.50 $ 60.00
Lot 2265 $ 0.269 $ 403.50 $ 0.35 $ 525.00 $ 121.50 $ 463.50 $ 60.00
Lot 2267 $ 0.269 $ 403.50 $ 0.35 $ 525.00 $ 121.50 $ 463.50 $ 60.00
Lot 2332 $ 0.269 $ 807.00 $ 0.35 $ 1,050.00 $ 243.00 $ 927.00 $ 120.00
Lot 2336 $ 0.269 $ 807.00 $ 0.35 $ 1,050.00 $ 243.00 $ 927.00 $ 120.00
Lot 2338 $ 0.269 $ 968.40 $ 0.35 $ 1,260.00 $ 291.60 $ 1,112.40 $ 144.00 Land lease actual cost increases
Lot 2346 $ 0.269 $ 403.50 $ 0.35 $ 525.00 $ 121.50 $ 463.50 $ 60.00
Lot 2348 $ 0.269 $ 371.22 $ 0.35 $ 483.00 $ 111.78 $ 426.42 $ 55.20
Lot 2356 $ 0.269 $ 403.50 $ 0.35 $ 525.00 $ 121.50 $ 463.50 $ 60.00
Lot 2357 $ 0.269 $ 403.50 $ 0.35 $ 525.00 $ 121.50 $ 463.50 $ 60.00
Lot 2358 $ 0.269 $ 807.00 $ 0.35 $ 1,050.00 $ 243.00 $ 927.00 $ 120.00
Lot 2374 $ 0.269 $ 968.40 $ 0.35 $ 1,260.00 $ 291.60 $ 1,112.40 $ 144.00
Lot 2376 $ 0.269 $ 968.40 $ 0.35 $ 1,260.00 $ 291.60 $ 1,112.40 $ 144.00
Lot 2384 $ 0.269 $ 968.40 $ 0.35 $ 1,260.00 $ 291.60 $ 1,112.40 $ 144.00
Lot 2386 $ 0.269 $ 968.40 $ 0.35 $ 1,260.00 $ 291.60 $ 1,112.40 $ 144.00
Total Annual Increase $ 9,697.08 $ 4,788.68
Total Average Annual Increase $ 285.21 $ 140.84 Supplemental information provided at 10.07.2020 BOA Meeting
Citizen Support Coordinator Report 10/7/20 Airport Hanger Lease Rates Julie Schelhorn (208)880-3756 called because she does a lot of building and work at the Nampa Airport. She had said that people had been talking about a meeting occurring on 10/7 to raises the rates for hanger space. She was upset that they had received no notice about this meeting. She said that she represents multiple people who live out of state but own hanger space at the Nampa Airport. She wanted clearer communication about when meetings were going to occur as well as to not raise the rates of hanger space. I explained to her that this was a Board of Appraisers meeting and one of their new business items is,” NAMPA MUNICIPAL AIRPORT LEASE AND RENT RATE ADJUSTMENT PROPOSAL.” I explained that in this meeting they are discussing the rates and further discussing their findings from their report. I also explained how this was not a finalized rate increase and that it would still need to be presented to City Council. She was thankful for the information and relieved that they still had time to voice their public opinion.
John Chris Droege (208)867-8468 his email, “just a note to let you know, as a conscience hangar owner at nampa....i am very concerned and DISPLEASED with the proposed increase in lease payment, and the RUSHED PROCESS, in making this type of decision...! we have a voice, and it needs to be heard ! the services provided to us, are limited at best...we take good care of the area...and i feel like we are Always singled out, as people who can just be charged more and more, each year ! the lease is too expensive as is...for a garage type building....the property taxes on the buildings are completely out of control too ! it is becoming more difficult each and every fall to justify in my personal budget, what we have to pay...when will the increases end? perhaps we can just take a breath, and think things through, as far as increasing costs to us endlessly!” I explained to Mr. Droege the purpose of this meeting and that it would still need to go before City Council before anything was finalized. That this was a meeting to talk about the rates.