Reno-Tahoe Authority FY 2017-18 ANNUAL BUDGET Table of Contents

SECTION 1 – Introduction and Summary

Airport System Overview...... 1-2 National and Regional Economic Outlook...... 2-13 Air Service Market Update...... 13-17 Air Cargo Update...... 17-19 Operating Environment...... 19-29 Budget Process...... 29-30 Revenue Bond Resolution ...... 30 Planning for the Future ...... 30-32 Budget Document Structure ...... 32 Conclusion ...... 32-33 Acknowledgments ...... 33 Distinguished Budget Presentation Award ...... 34

SECTION 2 – Executive Summary

Airline Activity Forecast ...... 35-36 Landed Weight Forecast ...... 37 Financial Summary ...... 38 Revenue Forecast ...... 38-40 Revenues ...... 41-43 Non-Airline Revenues ...... 43 Non-Operating Revenues ...... 43-44 Operation and Maintenance Budget ...... 44-47 Personnel Complement ...... 47 Debt Service ...... 47-48 Property, Plant and Equipment ...... 48-49 Capital Projects ...... 49 Revenue Sharing Credit ...... 49-50

SECTION 3 – Strategic Initiatives and Budget Goals

Mission Statement ...... 51 Vision Statement ...... 51 Strategic Priorities ...... 51-56 Guiding Principles/Operating Practices ...... 56-57 FY 2017-18 Budget – Resource Identification ...... 57-60 Department Responsibilities and Initiatives ...... 60

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SECTION 4 - Organization Guide

Board of Trustees...... 61 Additions or Changes ...... 61-64 Vacant Positions ...... 65 Organization Chart ...... 66 Personnel Complement Summary ...... 67 Personnel Complement Detail ...... 68-73

SECTION 5 Financial and Budgetary Policies

Basis of Accounting/Budgeting ...... 74 Legal Requirements ...... 74-75 Revenue ...... 75 Airline Agreement ...... 75-78 Bond Resolution – Trust Funds ...... 78-81 Liquidity and Working Capital Policy ...... 81-83 Investment Policy ...... 83-84 Debt Management ...... 84-85 Budget Process ...... 85-86 Budgeted Revenue Sharing ...... 87 Summary of Sources and Uses of Funds ...... 88 Projected Trust Funds Balances ...... 89 Days Cash on Hand ...... 90

SECTION 6 Revenues

Revenues ...... 91-92 Operating Revenue Pie Chart ...... 93 Revenue Summary ...... 94-112 Budgeted Revenues ...... 113-115 Non-Airline Revenues ...... 116

SECTION 7 Expenditures

Expenditures ...... 117-125 O&M Expenditure Pie Chart ...... 126 Summary of Budgeted Expenditures ...... 127 Resources Applied by Organizational Unit ...... 128 Departmental O&M Expenditure Pie Chart ...... 129

Board of Trustees Reporting Departments Board of Trustees, Internal Audit, General Counsel Summary ...... 130-131

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Board of Trustees...... 132 Internal Audit ...... 133 General Counsel ...... 134

President/CEO Reporting Departments President/CEO ...... 135-138 Air Service Business Development ...... 139-148 Marketing and Public Affairs ...... 149-159 Airport Economic Development ...... 160-168 Outside Properties ...... 169-170

Exec. Vice-President/COO Reporting Departments Executive Vice-President/COO ...... 171-174 Human Resources ...... 175-183 Technology and Information Systems ...... 184-190 Reno-Stead Airport ...... 191-194 Unmanned Aircraft Systems ...... 195

Finance and Administration Reporting Departments Accounting and Administration ...... 196-198 Purchasing and Materials Management ...... 199-202 Finance and Budgeting ...... 203-205 Non-Departmental ...... 206

Operations and Public Safety Reporting Departments Vice-President of Operations and Public Safety ...... 207-212 Airside Operations ...... 213-216 Landside Operations ...... 217-219 Airport Rescue and Fire ...... 220-223 Airport ...... 224-226 Airport ...... 227-230

Planning and Engineering Reporting Departments Planning and Environmental Services ...... 231-238 Engineering and Construction ...... 239-243

Facilities and Maintenance Reporting Departments Director of Facilities and Maintenance ...... 244-248 Airfield Maintenance ...... 249-252 Building Maintenance and Services ...... 253-255 Handling System ...... 256

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SECTION 8 Capital Budget

Property Plant & Equipment Summary ...... 257-259 Property Plant & Equipment by Department/Section ...... 260 Capital Projects Summary ...... 261-262 Capital Projects ...... 263 Capital Projects Detail ...... 264-283 Capital Improvement Program ...... 284-289

SECTION 9 Debt

Debt Summary ...... 290-295 Debt Service Allocation ...... 296 Summary of Bonded Indebtedness ...... 297 Schedule of Debt Service ...... 298 Net Pledged Revenues Test ...... 299

SECTION 10 - Supplemental Data

Supplemental Data and Graphs ...... 300-325

SECTION 11 - State of Budget Format ...... 326-335

SECTION 12 – Acronym and Glossary ...... 336-352

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   Section 1 – Introduction and Summary Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 1 – Introduction

Board of Trustees Reno-Tahoe Airport Authority Reno, Nevada

Airport System Overview

The Reno-Tahoe Airport Authority (RTAA) owns and operates both the Reno-Tahoe (RNO) and the Reno-Stead Airport (RTS). This FY 2017-18 Budget is the financial operation plan for both .

RTAA is a quasi-municipal corporation that was created by the Nevada State Legislature in 1977 and began operation on July 1, 1978. The nine-member Board of Trustees that governs the RTAA is appointed by the City of Reno (Four (4) Trustees), City of Sparks (Two (2) Trustees), Washoe County (Two (2) Trustees) and the Reno Sparks Convention and Visitors Authority (One (1) Trustee). The RTAA is an independent entity that is not part of any other unit of any state or local government and does not use property or sales tax revenue to fund its operation.

According to the Federal Aviation Administration (FAA), RNO is the 67th busiest airport in the nation based on passenger activity.

RTS is a general aviation facility that is home to approximately 200 based aircraft and the famous Reno National Championship Air Races. With 5,170 acres, RTS is also part of a Public Private Partnership between the RTAA and a private developer to create an airport-centric business park.

Together, these airports have over a $2 billion annual economic impact on the local economy.

The geographical area served by RNO (the Catchment Area) primarily encompasses the seven Nevada counties of Churchill, Douglas, Humboldt, Lyon, Pershing, Storey, and Washoe, and the major cities of Reno, Sparks, and Carson City (the capital of the State of Nevada). The total catchment area for the RTAA also includes the Lake Tahoe area and several communities in northeastern California.

RNO is a small hub airport as defined by the FAA that served 3.820 million total passengers in FY 2016-17. RNO passengers are currently served by the following air passenger carriers: Allegiant, Alaska, American, Delta, JetBlue, Southwest, United, and Volaris. Starting in November, 2017, Frontier will also begin service to RNO

In the past year, new or additional non-stop service has been added or announced to Atlanta (ATL), Chicago O’ Hare (ORD), Dallas Love Field (DAL), Denver (DEN), Oakland (OAK), Long Beach (LGB), and San Jose (SJC).

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RNO saw year-over-year growth in passenger numbers in Calendar Year 2016 for a second consecutive year. Prior to 2015, the previous calendar year-over-year increase was registered in 2005. RNO served 3,650,830 passengers in 2016, representing an increase of 6.4% when compared to 2015. This increase can be attributed to the growing regional economy and the partnership with tourism, business, ski and economic development organizations to attract travelers to the region.

In June 2017, RNO served 367,600 passengers, an increase of 8.5% as compared to the same period last year. In fact, the airport has experienced positive passenger growth for the past twenty-five (25) consecutive months.

Three major air cargo carriers (DHL, FedEx, and United Parcel Service (UPS)) also serve RNO. In FY 2016-17, air cargo represented almost twenty-two percent (22%) of total RNO landed weight, which significantly lowers overall landing fee costs for all carriers.

Air cargo is also experiencing record lift. Calendar Year 2016 was the best year ever recorded at RNO in terms of air cargo volume. During the year, RNO handled 156,410,910 pounds of air cargo, an increase of 13.0% when compared to 2015.

In the first six months of 2017, RNO handled 75,410,300 pounds of cargo, an increase of 2.2% when compared to the same period in 2016. This growth indicates the continued strength in the economy as well as the growing business diversification in Northern Nevada.

The presence of major warehousing, pharmaceutical, e-commerce and distribution facilities in the region play a key role in cargo growth. In addition, growth in industrial development areas such as the Tahoe-Reno Industrial Center (TRIC) has continued to help spur cargo growth and economic diversity.

National and Regional Economic Outlook

National Economic Outlook

The U.S. economy closed out 2016 on a firm foundation and the 2017 outlook is forecast to continue moderate growth. While the U.S. economy is in its eighth consecutive year of expansion, one of the longest periods of economic expansion in U.S. history, economists add a hint of disappointment that economic growth has been slower than previous recoveries.

The financial markets in early 2017 reflected greater optimism with the election of Donald Trump as President and the Republicans obtaining control of the House and Senate. This perspective reflected the view that it will be easier to get legislation passed and a campaign platform of greater infrastructure spending, lower individual and business income taxes, and

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increased spending. The reality to this point has been much different with Congress focused on health care and little progress being made on the other large agenda items.

While it is not clear how much or little of the new President’s package will become law, the potential of greater infrastructure spending may have a direct benefit to U.S. Airports. The RTAA is identifying and prioritizing its capital improvement needs to react quickly if additional funding becomes available. This effort fits perfectly with the current RNO Master Planning project currently underway as further discussed in the “Operating Environment” section in this Budget Message.

Most economists are forecasting that the Gross Domestic Product (GDP) will register solid growth between the 2.0% to 2.5% range and the economy will keep the unemployment rate below 5% or full employment. GDP in 2016 registered a modest increase of 1.6%. The U.S. unemployment rate reached a nine-year low of 4.3% in May 2017.

The U.S. economy is not experiencing significant inflation and continued lower oil prices have allowed the twenty-five (25) U.S. scheduled service passenger airlines to report an after-tax net profit as a group for the seventh consecutive year.

According to the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS), U.S. scheduled passenger airlines reported an after-tax net profit of $13.5 billion in 2016, down from $24.8 billion in 2015.

According to (A4A), improved and stable profitability has boosted additional investment in airline capacity, employee wages and reinvestment in improving the customer experience.

In December 2016, the Federal Reserve raised the Fed Funds rate to a range of 0.50% to 0.75%, an increase of 0.25% from the previous rate increase in December 2015. In March and June of 2017, the Federal Reserve announced further rate increases of 0.25% each time with the current rate of 1.00% to 1.25%. With this latest increase, most economists anticipate that the Fed will consider increasing once more in the second half of the year.

The Fed Funds rate controls short-term interest rates, such as banks' prime rate, LIBOR, adjustable-rate and interest-only loans, and credit card rates.

Despite these increases, interest rates still remain near historic lows and credit-worthy borrowers should continue to have access to inexpensive loans and mortgages. However, higher interest rates and price appreciation in real estate are never good news for home sales.

The upside of modestly higher interest rates is the positive impact on RTAA’s investment earnings derived from our investment portfolio.

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Despite periods of financial market volatility and political uncertainty, the U.S. economic outlook is not forecasted to change significantly and it is likely to proceed at a moderate pace. This outlook is reflected in the RTAA’s passenger traffic and revenue forecast for FY 2017-18.

Regional Economic Outlook

In 2016, Northern Nevada’s recovery gained momentum as the region continued to experience economic revitalization. Experts are bullish on Nevada's overall economy in 2017 and our region has finally recovered from the Great Recession of 2008-2009.

In its inaugural American Dream Index, Forbes Magazine in May 2017 ranked each state in terms of providing the middle class with the best access to the American Dream and Nevada scored the best overall. Nevada’s score was based on big gains in goods-producing jobs in manufacturing that decides to locate in our state. In addition, Gallup’s 2016 Job Index survey reported that Nevada climbed from last place to first place in job creation.

According to the Nevada Department of Employment, Training and Rehabilitation (DETR) Nevada’s economy grew in each of past 14 quarters with Gross Domestic Product (GDP), exceeding the national economy in the past four quarters. All of the State's major sectors of employment have added jobs in 2016 with construction experiencing the greatest percentage growth at 7.3 percent.

While Nevada’s mainstay gaming and tourism sectors are showing renewed vigor of their own, it is the efforts to diversify the economy that has economists bullish about the region’s outlook. One of the largest drivers is Tesla Motor’s new $5 billion “Gigafactory” under construction 17 miles east of Sparks. This battery manufacturing facility is estimated to generate 6,500 direct on- site jobs and 10,700 indirect jobs in the community for a total of 17,200 jobs.

In addition to the significant employment at Tesla, this project has put Northern Nevada on the national map for high tech manufacturing and data centers, software development, research and development including unmanned aircraft systems, and investors willing to finance these ventures. An additional factor is that many self-employed and entrepreneurial individuals and firms are leaving California for tax reasons.

According to the state data, Northern Nevada has added more than 30,000 jobs since January 2012 and, over the next five years, the Economic Development Authority of Western Nevada (EDAWN) is estimating over 50,000 new jobs are coming to the Reno/Sparks area. This represents continued growth in the transportation, warehousing, manufacturing and advanced technology sectors.

Using the unemployment rate as an indicator of relative economic performance of the region, the Reno/Sparks area has seen vast improvement with a drop in the June 2017 unemployment rate to

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4.0%, a decrease of 9.3% from the recession peak and modestly below the state and national average.

For nearly two years, RCG Economics, the firm hired in 2015 to provide a Northern Nevada Regional Growth Forecast for the Economic Planning Indicator Committee and EDAWN, has plotted job and population growth in northwestern Nevada as compared to its forecast. The actual results are tracking very closely with the medium forecast scenario (Scenario B) of jobs in our region projected to grow by 52,400 jobs from 2015 to 2019.

The U.S. Census Bureau named Nevada the second-fastest growing state and 12th for total population change in the nation in 2016. The Silver State’s population grew to about 2.94 million in 2016, a 1.95% increase from the previous year. Only Utah grew at a faster rate of 2.03%. Nevada was ranked the fourth-fastest growing state in 2015 with a growth rate of 1.85%.

As the local economy gathers such positive national coverage, the economic data supports an optimistic picture with continued job growth and expansion, a low unemployment rate, and an increase in median home prices.

While enjoying the benefits of this growth, our region also faces the challenges of investing in needed infrastructure (transportation, utilities and schools), building and maintaining affordable housing, attracting talent, and providing a trained workforce. As a first step, Washoe County voters approved in 2016 an increase in sales taxes to support funding of public school infrastructure.

The following factors are forecasted to continue to positively impact the outlook for next year:

 Tesla Motors, Inc. In September 2014, Tesla Motors picked Northern Nevada as the location of the electric-car company’s $5 billion battery plant, dubbed the “Gigafactory”. In cooperation with Panasonic and other strategic partners, the Gigafactory’s stated goal is to produce batteries for significantly less cost using economies of scale, innovative manufacturing, reduction of waste, and the benefit of locating most of the manufacturing process in one facility. Workers are currently in the process of installing machinery Panasonic will use to process raw materials into battery cells. Tesla will then take the cells and configure them into packs for cars and other products.

With Tesla’s mission to transition to sustainable transportation, the company has a planned production rate of 500,000 relatively inexpensive cars per year (Model 3) with initial production initiated in July 2017. At this level of production, Tesla alone will require today’s entire worldwide production of lithium ion batteries.

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In February 2017, Tesla’s CEO Elon Must said the factory will have the ability to produce batteries and power train parts for as many as 1 million vehicles annually, a huge increase from the approximately 25,000 vehicles the company produced in 2016.

In addition, Tesla is launching a new product line of large batteries that store energy in homes and even larger batteries that do the same for utilities and businesses. The idea is to pair the new Tesla products with solar panels, either on the rooftops of homes or in large- scale solar farms, which will store excess energy generated during the day so that it can be used at night at no cost. Battery production at the “Gigafactory” is about more than cars.

Northern Nevada was chosen in part because of the location; a direct route to Tesla’s car factory in California is available using rail and Interstate 80 and Northern Nevada is home to the only lithium mine in the

At the end of 2016, battery cell production has started at the “Gigafactory” and Tesla is now hiring 150 to 200 new workers a month. Overall, current estimates are that 1,000 employees are now in place with approximately 3,200 employees scheduled to be in place by March 2018. Currently, there are an estimated 2,000 construction workers constructing the “Gigafactory”.

In January 2017, the Governor also announced that electric motors and gearboxes for the Model 3 will now be manufactured at the “Gigafactory”. This expanded manufacturing will yield more than $350 million in additional capital investment and will result in 550 additional skilled jobs.

The economic impact of this $5 billion, 5 million-square-foot factory goes beyond just the jobs at the plant. The additional high quality jobs will ripple through the economy as employees and suppliers buy new homes, shop at local businesses and increase the tax base.

It is no wonder that this announcement has been called a deal that “changes the world”, “a once in a generation opportunity”, and was awarded the 2014 Economic Development Deal of the Year Award by Business Facilities Magazine.

 Technology / Data Center Facilities. The Union Pacific’s “Overland Route” with the Interstate 80 (I-80) corridor and railroad Right-of-Ways (ROWs), which passes through Reno/Sparks, also serves as a primary east/west, state-of-the-art digital and fiber optic highway for internet traffic. The Northern Nevada region is a network access point served by six major interstate fiber-optic networks and all major long-distance carriers, including AT&T, Level3, Qwest, and Verizon. Recent fiber dense wave digital modulation (DWDM) infrastructure improvements by major network operators allow for superior, large corporate volume data throughput.

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As a result of all these regional benefits, Apple, Inc. is rapidly building out its $1 billion data center, which hosts various online services. This facility provides services such as the iTunes store, the App Store, and Apple’s iCloud data storage and syncing services. Located on 345 acres approximately 11 miles east of Sparks, Apple's operations currently are comprised of 14 buildings and 412,000 square feet of space. Several sources report that Apple is now pursuing additional space at the site to power its iCloud services.

On January 26, 2017, NV Energy, the state’s largest electric utility, and Apple reached an agreement to build a solar plant to supply Apple’s renewable energy needs at its Reno data center. NV Energy said the 200-megawatt project will add “hundreds of jobs” and increase the 1,900 megawatts of clean renewable power already produced for the utility’s customers. The ability to provide innovative companies such as Apple and Tesla clean energy renewable energy resources is important to the region’s ability to attract such firms.

At the time of Apple’s announcement, it was predicted that the economic benefits of Apple’s new facility would likely multiply because the company is so well respected that other corporations are likely to give Northern Nevada a closer look.

This prediction has come true with the opening of SUPERNAP Data Center by Switch in the Tahoe-Reno Industrial Center on November 1, 2016. Named Tahoe Reno 1, the 130 megawatt facility of 1.3 million square feet of space is the first of several data center buildings planned for the project. Once completed, the campus will house seven buildings totaling 6.49 million square feet of space and is projected to be the largest data center in the world.

Unlike Apple, which builds and runs its own data centers, Switch builds data centers and leases space and equipment to its clients, who are responsible for operating and maintaining them. Switch now has more than 1,000 customers, including eBay, DreamWorks, Activision, eHarmony and Boeing. Switch is a global technology solutions company born and bred in Nevada.

The data center will be a critical link in a new fiber loop, which will extend from , , Reno-Sparks and the San Francisco Bay Area. The $4 billion SUPERNAP facility will allow Switch to expand its Las Vegas footprint and to allow two California metropolitan areas, which are over 500 miles apart, to communicate with 50 million people in 14 milliseconds with both redundancy and scalability.

With the internet growing at an exponential rate, our proximity to the Bay Area and all of this data needed to be stored somewhere, the Tahoe-Reno Industrial Center (TRIC) and the region is strongly positioned to enjoy future data center growth and investment.

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In addition, data centers are constantly replacing approximately 1/3 of their equipment every year. Much of this equipment is shipped into RNO via air cargo. With equipment costs of approximately $10 million per megawatt, the Apple data center will be shipping approximately $200 million per year in air cargo to refurbish its 60-megawatt facility.

In April 2017, it was also announced that another major high tech firm, Google, acquired more than 1,200 acres to potentially build a new data center facility at TRIC. While Google has not broken ground on their facility and the future plans for the site are unknown, the announcement has generated significant attention to the tremendous growth in manufacturing and technology in Northern Nevada.

 Industrial Real Estate Market. A third quarter 2013 industrial land inventory report completed by Truckee Meadows Regional Planning Authority (TMRPA) found that Washoe County lacks a pipeline of development-ready land for new industrial companies to enter the region over the next twenty (20) years.

In the report, the buildable lands inventory within Washoe County indicated the following:

 1,200 vacant buildable acres on land with industrial zoning, which includes land zoned primarily for industrial uses

 1,600 vacant buildable acres on land with mixed use and planned unit development (PUD) zoning that allows industrial uses, which includes mixed-use and PUD lands

 2,400 vacant buildable acres on lands owned by the Reno-Tahoe Airport Authority (airport lands) that are planned to support industrial uses

Of these, the 2,800 acres of land zoned for industrial or mixed-use and PUD (shown in the first two bullets above) are generally considered by TMRPA as having the most development potential.

Vacant properties owned by the RTAA accounted for 37% of the vacant industrial lands in Washoe County and 60% in the City of Reno listed above. While lands owned by the RTAA are only available for long-term lease rather than sale, which may impact the location choices made by industrial businesses, the Reno-Stead Airport (RTS) can accommodate growth of businesses that need large sites.

With Reno-Sparks serving as an active distribution hub for the 11 Western states, e- commerce firms (on-line internet shopping), such as Amazon, Petco and Urban Outfitters, have chosen to locate and grow in Northern Nevada.

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With available land being in short supply in the future, land at both airports, which is available for long-term commercial lease, is receiving significantly more interest from both local and national development firms.

In response, the RTAA has formed a Public Private Partnership to facilitate land development as outline in the “Operating Environment” section under “Land Development – Reno-Tahoe International Airport (RNO)” and “Land Development –Reno-Stead Airport (RTS)”.

Unmanned Aircraft Systems. The Federal Aviation Administration (FAA) selected Nevada as one of six test sites for unmanned aircraft systems (UAS) in December 2013. Historically, unmanned aircraft have been known by many names including: “drones”, “remotely piloted vehicles (RPV)”, “unmanned aerial vehicles (UAV)”, “models”, and “radio control (R/C) aircraft.”

With commercial UAS offering a broad range of activities ranging from aerial photography, land and crops survey, communications and broadcasting, forest fires and environmental monitoring, and even cargo delivery, the UAS industry offers a source of high-wage jobs with exceptional potential for growth.

With the Reno-Stead Airport (RTS) being one of the most accessible, non-military ranges in the Nevada test site, staff has been actively promoting RTS through hosting UAS demonstrations, testing, sponsoring conferences, developing industry relations, and enhancing the RTAA’s website and other direct marketing materials.

In addition, the RTAA took a leadership role in support of the Governor’s Office of Economic Development’s (GOED) successful 2015 legislative effort to abate a portion of aircraft parts sales and use taxes. This legislation has and will continue to benefit the UAS sectors as well as existing RNO maintenance, repair and operations (MRO) tenants.

Working within an evolving and ever changing environment, the RTAA continues to work with GOED and the Nevada Institute for Autonomous Systems (NIAS) Program Management Office (PMO) to bring UAS testing to RTS.

During 2016, RTS was host and provided operational support for four (4), multi-day UAS testing sessions by the National Aeronautics and Space Administration (NASA). The effort was designed to test NASA software by providing a live, virtual environment of simulated air traffic. The on-going purpose is to expand use of existing UAS test ranges for the development of sense-and-avoid technologies.

In addition to supporting UAS testing as a means to attract economic development at RTS, the RTAA’s President/CEO Marily Mora in 2016 received an appointment to the Drone

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Advisory Committee (DAC) established by the FAA. This committee was formed to provide an open venue for the FAA and key decision-makers supporting the safe introduction of Unmanned Aircraft Systems (UAS) into the National Airspace System (NAS).

On January 31, 2017, the RTAA hosted the first 2017 meeting of the DAC in Reno-Tahoe. Whitney Peak and the Eldorado Hotel hosted attendees on the evening of January 30th and the one-day meeting was held at the University of Nevada Reno (UNR). This meeting included approximately thirty-five (35) DAC members and a subcommittee, which includes the appointment of RTAA’s Executive Vice President/COO Dean Schultz, of about seventy (70) UAS users and affiliates. This meeting gave the RTAA a chance to showcase UAS capabilities at the RTS and the economic development opportunities at both Airports.

In May 2017, RTS was again home to UAS testing of over six (6) flying days, eighty (80) flights, and five (5) drone companies – Amazon Prime Air, Del Air Tech, Carbon Autonomous, and two Reno-based companies: Flirtey and Drone America. Not only did the test flights push data to the NASA traffic system, but also began flights Beyond Visual Line of Sight (BVLOS) of the pilot and conducted actual supply drops with parachutes. In addition to the flying companies, four (4) sensor companies tested electronic detect-and- avoid systems. The RTS staff provided operational support to ensure a successful effort.

The FY 2017-18 Budget incorporates funding to provide operational support of UAS testing and administrative expenses to participate in the DAC committee and to continue marketing UAS development at RTS.

 Tourism and Convention Visitor Update

Tourism in Northern Nevada continues to strengthen and improve. According to the UNR Center for Regional Studies, visitor counts for 2016 hit 4.9 million as compared to 4.7 million in 2015. In addition, the Reno-Sparks Convention and Visitor Authority (RSCVA) is projecting taxable room rates to exceed $300 million by the end of FY 2015-16, the second time in Washoe County’s history. The first time was immediately preceding the recession.

Washoe County room occupancy percentages of 77.1 percent for the month of June 2017 are 4.3 percent above the 73.9 percent level for the same month last year, according to the Reno- Sparks Convention & Visitors Authority (RSCVA).

Recent good news is the announcement by Safari Club International Annual Hunters’ Convention announced its return to Reno starting in 2019 for three years. The convention draws 20,000 people from 103 countries annually. The convention was last held in Reno in 2013.

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Starting in 2018, Interbike, the largest annual U.S. cycling trade show, announced it has selected Reno-Tahoe as the new home for its annual trade show and the site of the newly- created Interbike Marketweek. The three-day trade show will be preceded by a two-day consumer festival and a day-and-a-half trade demo event at the Northstar California Resort at Lake Tahoe before moving inside for the trade-only show at the RSCVA convention center. Interbike has committed to the convention center through 2022. The full event is being called Interbike Marketweek.

According to the RSCVA, Interbike Marketweek is expected to bring an estimated $21 million to our region and represents the largest trade show ever booked in our community with 25,000 attendees and 1,200 cycling-related brands annually.

 Gaming Market Update

For the Fiscal Year ending June 30, 2017, the Gaming Control Board reported statewide gaming revenues of more than $11.4 billion, an increase of 2.9% above the same period last year. This increase marks the sixth annual increase in the past seven fiscal years. This increase comes at a time when casinos generate more earnings from restaurants, shopping, entertainment and room rentals than on gaming.

In Washoe County, gaming revenues have come up from their recession lows; however, they have not yet reached pre-recession levels. Industry experts expect further increased in 2017, but not at a very fast pace. In FY 2016-17, Washoe County casinos reported gaming revenues of $805.47 million, an increase of $16.1 million or 2.0% higher than the previous fiscal year.

With the upswing in the economy, 2016 continued to renew interest and investment in gaming properties. Reno’s Eldorado Resorts recently acquired MGM Resorts’ fifty percent (50%) stake in the Silver Legacy Resort Casino as well as neighboring Circus Circus. Eldorado Resorts now owns the three largest hotel-casinos in downtown Reno and is carrying out $50 million of renovations. The renovation plan for the three connected properties includes renovation of over 4,100 guest rooms, introduction of new restaurant concepts, nightlife and resort amenities.

The in Sparks, which was sold to Marnell Gaming in May 2016, began $25 million in renovations in January 2017 with a focus on major upgrades to the west tower hotel rooms and the convention space.

In addition, other hotel/casino operators in the Greater Reno-Sparks Area are investing heavily in their properties with completed or in progress renovations including $10 million at the Atlantis Casino Resort Spa, $40 million at the , $10 million at the Peppermill Resort Hotel, and $10 million at the Whitney Peak Hotel.

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In addition to existing properties, Las Vegas based Station Casinos plans to add a new $50 to $70 million non-hotel gaming and entertainment facility near the Reno-Sparks Convention Center. Station Casinos announced the new facility will provide much-needed entertainment options in the area, such as a bowling center, theater, sportsbook and sports bar, mobile sports wagering kiosks and cafe. The new casino will employ up to 200 employees when completed. The new property’s design allows for the addition of lodging in the future should Station Casinos decide to expand their operation.

The hotel/casinos at Lake Tahoe are also investing heavily with completed or in progress renovations including $60 million at the Hard Rock Hotel and Casino, $27 million at the Lake Tahoe Hyatt in Incline Village, $24 million at MontBleu Resort Casino & Spa in South Lake Tahoe, and $10 million at Cal Neva Resort in North Lake Tahoe. In addition, the Ritz- Carlton, located at Northstar Mountain, announced plans for a new beach club facility with direct access to the lake.

 Skiing Market Update

According to a recent Ski Lake Tahoe/Sierra Ski Marketing Council Regional Economic Impact Study, skier visits to all major Lake Tahoe ski resorts was 3.758 million during the 2015-16 season, an increase of 1.038 million or 38% over the 2013-14 drought impacted season.

With the recent record-breaking rain and snow this winter, which has ended the punishing five-year drought impacting California and Nevada, the FY 2016-17 ski season has almost been impacted by too much snow. Lake Tahoe ski resorts enjoyed some of the best conditions this decade. The snowstorms doubled the snowpack in parts of the Sierras, runoff from which provides California and Northern Nevada with much of their year-round water supply, are reporting twice the normal amount of rain and snow.

Reno experienced its wettest winter on record and many Lake Tahoe-area ski resorts continued to host Fourth of July skiing and snowboarding. Squaw Valley Resort closed its winter season on July 15th marking its latest closing date in the history of the resort.

Figures from the National Ski Areas Association (NSAA) released in January 2017 illustrate just how significant the impact of this year's El Niño was on the West. According to preliminary data from the NSAA, to which U.S. ski areas annually report visits and other information, visits for the southwest region (California, Nevada and Arizona) increased by 53.1 percent over the previous year, reaching a total of 7.38 million.

Lake Tahoe ski resorts have made significant on-going capital improvements in excess of $100 million over the last five seasons, which has greatly enhanced the guest experience. Improvements include upgraded snowmaking systems, new chairlifts, extensive base area

12 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 1 – Introduction

renovations, and more than 30,000 square feet of new retail storefronts and restaurants planned over the next few years.

In addition, Squaw Valley has proposed sweeping development plans to invest up to $1 billion over the next 25 years to add a new hotel, retail, restaurants, entertainment and recreational facilities in Olympic Valley to position the resort as a true four-season destination.

 Bowling Tournament Update

With the National Bowling Stadium in downtown Reno, championship bowling has always represented an important influx of visitors to our community. On January 15, 2015, the U.S. Bowling Congress, the Reno-Sparks Convention & Visitors Authority (RSCVA) and the City of Reno executed a contract that will keep six bowling tournaments in town through 2026.

The bowling championships will be hosted in Reno as outlined below:

FUTURE USBC CHAMPIONSHIPS CITIES Year Women's Championships Open Championships 2017 Baton Rouge, La. Las Vegas 2018 Reno Syracuse, N.Y. 2019 Wichita, Kan. Las Vegas 2020 Las Vegas Reno 2021 Mobile, Ala. Las Vegas 2022 Las Vegas Reno 2023 Reno Las Vegas 2024 TBD Reno 2025 Reno Baton Rouge, La.

Per the revised calendar, Reno will next host the Women’s Championship in 2018 with the Open Championship returning in 2020.

The return of the women’s championship tournament in Reno during the FY 2017-18 Budget Year has been reflected in the passenger traffic activity forecast.

Air Service Market Update

Passenger Airlines

The 2016 financial results for the 10 publicly traded U.S. airlines (Alaska Airlines, Allegiant Airlines, , Delta Air Lines, Hawaiian Airline, JetBlue Airways, Southwest

13 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 1 – Introduction

Airlines, Spirit Airlines, and Virgin America) continues to reflect profitable operations due primarily to lower fuel costs. These airlines collectively reported pre-tax earnings of $22.3 billion in 2016 as compared to $23.3 billion in 2015, a decrease of $1.0 billion or approximately 4%. Collectively, these airlines reported a pre-tax profit margin of 14.2% in 2016 as compared to 14.7% the previous year.

According to Airlines for America (A4A), the industry trade group, the airilines combined operating revenues in 2016 were $ 157.1 billion, a decrease of 1% from $158.6 billion in 2015. This result reflects 5.2% in lower offset by 3.1% traffic growth.

Combined 2016 airline operating expenses totaled $132.5 billion, up 0.9% or $1.2 billion as labor costs grew 9.3%. With fuel costs being down 17% in 2016 as compared to the prior year, this lower fuel cost has allowed the airlines to increase employment and wages. Full-time equivalent (FTE) employment at U.S. passenger airlines reached over 411,100 jobs in 2016, the highest level since 2007.

A4A also reported that every U.S. flight in 2016 needed to fill 2 out of every 3 seats or 67% to avoid losing money. With load factors over the past five years ranging from 77% to 84%, a decrease of the breakeven point from 81% in 2011 to 66.8% in 2015 represents the improving profitability.

The improved airline cash flow in 2016 has allowed U.S. airlines to retire debt, acquire new aircraft, upgrade facilities, expand Wi-Fi, deploy more seats and reward investors. According to A4A, customers are seeing domestic seat supply at its highest level since 2005. Traffic on all U.S. airlines reached record highs in 2016 with enplaned passengers rising 3.1% to 823 million.

The passenger airline industry continues to go out of its way to downplay the significant improvement in financial results and is focusing its message on reminding the public that the industry remains a low-margin business.

For FY 2016-17, RNO’s total passenger traffic of 3.820 million was significantly up by 7.2% as compared to the same period last year and up 6.0% as compared to the FY 2016-17 adopted budget.

Starting in June 2015, the positive economic winds and cumulative efforts of the community and RTAA staff continue to be rewarded with RNO registering twenty-five (25) month-over-month increases in passenger traffic as compared to the prior year.

The signatory airlines of Alaska, Delta, Southwest and United reported approximately 92,700 more enplaned passengers in FY 2016-17 than the same period last year. This increase is partially offset by lower enplaned passengers by American of 14,900.

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In addition, the impact of service by RTAA’s non-signatory airlines (Allegiant, JetBlue and Volaris) has resulted in 52,900 additional passengers in FY 2016-17.

This significant increase reflects the impact of the following new air service:

1. Starting March 16, 2016, Alaska Airlines began non-stop daily flights between RNO and John Wayne Airport, Orange County (SNA). Horizon Air, Alaska’s sister carrier, flies the route with a 76-seat Bombardier Q400 aircraft. This new service offers a Southern California alternative to Los Angeles International Airport (LAX) and allows local travelers easier access to amusement parks in Orange County.

2. Starting June 5, 2016, Southwest Airlines brought back non-stop service to Oakland, CA with convenient three times a day service. Southwest flew the Oakland-Reno route until June of 2013 and the reestablishment of this service has been a top priority for the RTAA ever since. With the support of both the business and the tourism community, non-stop Oakland service has given both business and leisure travelers another option for between RNO and the Bay Area.

3. Starting on August 15, 2016, JetBlue gave travelers another option of travel between RNO and the Los Angeles basin with a new non-stop daily flight to Long Beach. JetBlue flies the new route with a 150-seat Airbus 320 with convenient mid-day service for business travelers.

4. On December 19, 2016, Delta Air Lines began non-stop seasonal flights between RNO and Atlanta International Airport. The flight operated once a week, Saturday arrival and Sunday departure through March 26, 2017. The airline utilized a 180-seat Boeing 757 aircraft on this route.

5. Southwest Airlines began once a week seasonal non-stop flights between RNO and Dallas Love Field Airport (DAL) on January 7, 2017. Starting on March 12, 2017, the airline increased the number of flights between RNO and DAL from one flight a week to two flights a week. The additional flight will operate on Sundays.

6. Starting February 5, 2017, Allegiant Air increased the number of flights between RNO and Las Vegas from three times a week to six times a week. The airline provides this service from Sunday through Friday.

The dramatic and positive change in monthly enplaned passengers is outlined in the graph below:

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Looking forward into the new FY 2017-18, the following new service announcements will have a positive impact on passenger and aircraft activity:

1. Starting June 4, 2017, Southwest Airlines offers daily, non-stop service to San Jose International Airport (SJC), adding to the travel options between Reno and the Bay Area. The RNO-SJC route is currently served by Alaska Airlines on 76-seat Q-400 aircraft.

2. Starting June 8, 2017, United Airlines offers daily, non-stop seasonal service to Chicago O’Hare International Airport (ORD), adding to the summer travel options between Reno and Chicago. American Airlines currently provides non-stop daily service between RNO and ORD and Southwest provides service to Chicago Midway (MDW).

After the adoption of the FY 2017-18 Budget, the RTAA learned that Frontier Airlines will be returning to RNO after a ten-year absence. The new service at RNO will begin on Nov. 21, 2017 with three (3) times a week to Denver International Airport (DEN) on an Airbus 320 with 180 seats.

The Denver‐based, ultra‐low‐cost carrier offers many connections from the Mile High City including service to more than 55 cities in the United States, and the Dominican Republic on approximately 275 daily flights. The Denver market in RNO is also served by United Airlines and Southwest Airlines.

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Frontier’s return to our region is a testament to the area’s economic success and the hard work of our air service team and our community partners. This announcement brings us to a total of nine (9) airlines serving RNO, which is truly impressive for a community of our size.

In order to forecast passenger traffic and air carrier landed weight for the fiscal year, staff obtained each carrier’s flight schedules for the next six months, which included aircraft type and available seats. Using this data, a projection for the remainder of the next fiscal year was developed, which included likely seasonal adjustments. In addition, staff estimated each carrier’s load factor based on recent actual results and improving national and regional economic conditions.

Going forward into FY 2017-18, the enplaned passenger traffic forecasts reflects both an 8.1% increase above the adopted FY 2016-17 Budget of 1,801,291 and continued solid growth of 2.0% above the actual results achieved in FY 2016-17. This growth is reflected in the revenue estimates outlined in Section 6 Revenues.

The following table compares the enplaned passenger traffic used to develop the proposed FY 2017-18 Budget as compared to the current year adopted budget and the actual FY 2016-17 results: Reno-Tahoe International Airport Enplaned Passenger Forecast

FY 2016-17 FY 2017-18 Variance to Percent Adopted Budget Proposed Budget Prior Year Change FY 2015-16 1,778,611 1,778,611 Actual Actual FY 2016-17 1,801,291 1,909,187 130,576 7.3% Budget Actual FY 2017-18 1,948,002 38,815 2.0% Budget

Cargo Airlines

Air cargo is also experiencing record lift. Calendar Year 2016 was the best year recorded at RNO in terms of air cargo. During the year, RNO handled 156,410,910 pounds of air cargo, an increase of 13.1% when compared to the year 2015.

17 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 1 – Introduction

In the first six months of 2017, RNO handled 75,410,300 pounds of cargo, an increase of 2.2% when compared to the same period in 2016. This growth indicates the continued strength in the economy as well as the growing business diversification in Northern Nevada.

Nevada has become the West Coast distribution hub due to its strategic location with the Reno/Sparks area providing next-day ground service to almost every major U.S. city in the western United States. This growing sector of the region’s economy includes the presence of major warehousing, pharmaceutical, e-commerce and distribution facilities including such companies as Amazon, Walmart, Petco, Urban Outfitters, eBay, Zulily and 1-800-Flowers.com.

This growing sector of the economy, along with growth in industrial development areas such as the Tahoe-Reno Industrial Center, has played a key role in cargo growth at RNO.

In the proposed FY 2017-18 Budget, air cargo represents 21% of total RNO landed weight, which is a significant factor in lowering overall landing fee costs for all carriers.

Existing air cargo operations occupy about 25 acres to the north of the passenger terminal with two buildings used for air cargo activities that consist of approximately 67,300 square feet. The ramp facilities can handle 14 aircraft. In the near future, the north cargo facilities will likely be near capacity and the master plan, as discussed in the Operating Environment section below, is evaluating options to address the long-term solution, which may include improvements to the southwest quadrant of RNO.

18 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 1 – Introduction

In addition to cargo-only carriers, passenger airlines also provide cargo services at RNO. In FY 2016-17, passenger airlines accounted for approximately 3% of all cargo, of which Southwest Airlines represent 85% of this total.

The growth in outbound cargo freight is making RNO an increasingly prominent component on Southwest’s cargo map. According to Southwest spokesman Dan Landson, “the airport (RNO) is now among the fastest-growing cities in the carrier's cargo network.”

Operating Environment

In evaluating the RTAA’s operating circumstances, five (5) significant programs impacted the development of the FY 2017-18 Budget.

RTAA Strategic Plan

To help guide the future of the RTAA, the Board of Trustees (Trustees) in June 2013 approved a Strategic Plan for FY 2013-14 through FY 2017-18. This five-year plan serves as a guide to staff as it faces an ever-changing aviation industry and economic cycles. It was created through a public process that invited participation from airport committees, user groups, Trustees, staff and the public.

With a focus across the whole organization, the strategic priorities are as follows:

1. Strategic Priority – Increase Air Service

The Reno-Tahoe region’s ability to create demand and sustain it is what will ultimately result in more air service. RTAA will continue to actively engage in the activities essential to grow and sustain airline service, in partnership with business, community, government and other regional stakeholders.

2. Strategic Priority – Optimize General Aviation Operations and Services

General Aviation (GA) includes all operations other than scheduled passenger and service. General aviation flights are conducted for pleasure, private business and public services that need transportation more flexible than offered by the airlines. GA also provides access points to small towns and rural communities across the state/region that does not have commercial air service. With GA representing approximately 34% of all aircraft operations, available services and facilities should reflect positively on the community.

19 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 1 – Introduction

3. Strategic Priority – Expand Cargo Development and Service

Air cargo, or goods transported by aircraft, serves as a key engine of economic growth and development for RTAA and the region. Air cargo development is a significant revenue generator for the airport and creates a positive domino effect throughout the region as it relates to local business activity and economic impact.

4. Strategic Priority – Facilitate Economic Development at both Airports

Enhancing long-term financial stability, diversifying revenue streams, and remaining self- sufficient is a foundational strategy for the RTAA. While direct airline rates and charges contribute approximately 34% of the revenue stream, the remaining 66% are generated by non- airline sources such as parking fees, rent collected from airport tenants, rental car and terminal concessions, hangar and land leases, etc.

5. Strategic Priority – Provide a Positive Environment and Experience for All

The airport makes the ultimate first and last impression when people come to the region; it is the RTAA’s goal to continue a positive environment and influence a favorable, lasting impression on everyone who visits, works at and utilizes both airports.

Along with these Strategic Priorities, the RTAA is committed to the following key Guiding Principles/Operating Practices that guide our everyday efforts:

A. Safety and Security – The safety and security of everyone who utilizes our airport facilities is our primary concern.

B. Customer Service – Satisfied customers are the hallmark of a healthy and vibrant service organization and RTAA staff is committed to ensure that all of customers receive the very best service possible.

C. Financial Integrity – RTAA will do all we can to ensure the financial stability of the airports under our control and staff is committed to honesty and transparency in all of our financial transactions.

D. Professionalism and Ethics – RTAA values and respects the contribution each individual makes to the success of our endeavors. Each employee is held to a standard of professionalism and ethical behavior that respects and supports each customer and fellow employee.

E. Environmental Responsibility – RTAA is committed to environmental awareness and protection. Our staff will strive to develop policies and procedures that minimize the

20 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 1 – Introduction

impact of airport operations on the natural environment and our organization supports and pursues environmentally sustainable aviation business practices.

Each individual department budget outlines initiatives, in support of the strategic plan, that are the core focus of the proposed FY 2017-18 Budget.

With the current Strategic Plan expiring on June 30, 2018, the proposed budget includes funding for a consultant to facilitate the Trustee’s update or modification of the current plan. The proposed update schedule is designed to enable the Trustees to have preliminary recommendations and findings of the long-term Master Plan effort prior to the plan update.

In addition, the Strategic Plan update schedule will allow staff to develop action plans and identify funding for inclusion in the FY 2018-19 Budget. Please see the “Master Plan- Reno- Tahoe International Airport” discussion as outlined in this section.

Air Service Development

The success in expanding service by existing carriers as outlined in the Air Service Market Update reflects the combined efforts of the RTAA and a regional partnership with the Regional Air Service Corporation (RASC), comprised of convention and visitor bureaus, hotels, casinos, ski resorts, and various business groups. In addition, the community partnerships with the Reno- Sparks Convention and Visitors Authority (RSCVA), the Economic Development Authority of Western Nevada (EDAWN) and local chambers of commerce and associations have all played an important role in the recent success.

In September 2016, the RTAA successfully hosted the Boyd Aviation International Forecast Summit (“Summit”). Over the last two decades, the Summit has evolved into a prestigious and insightful air service event bringing together the world’s most influential and respected airline and airport professionals.

Not only did it give the RTAA an opportunity to showcase the destination to many in the aviation industry, but it gave Trustees and staff the opportunity to spend quality time with: (a) sixty-two (62) airline representatives (approximately ½ were executive level or higher) many of whom had never been to Reno-Tahoe; (b) sixteen (16) media representatives; and (c) ten (10) aircraft manufacturer representatives.

Looking forward into FY 2017-18, staff is committed to building on this success by continuing its aggressive marketing program that includes the following:

(a) Support of existing air service through a route maintenance and community awareness program. This effort will include local market advertising and on-going outreach to community partners on air service (i.e. sales, mileage program promotion).

21 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 1 – Introduction

In mid-spring through early summer of 2017, the RTAA executed the first phase of a new Community Outreach Advertising Campaign. The campaign’s primary goal is to educate local residents in the RNO catchment area on the flights and airline options available.

In addition, this effort is also focused on expanding the reach of our air service by growing the RTAA contact database, social media followers, website visitation and “cookie pool” for retargeting activities.

The considerations used in developing the campaign were the following:

 Build awareness for all air service options (Cities/Airlines)  Develop a strategy that would provide promotional benefits beyond the campaign timeframe  Develop a campaign that would engage our community and get them excited about air service  Develop a campaign that would start a conversation about air service and RNO  Provide value and partnership to airlines that serve RNO

The campaign longevity of the first phase was approximately twenty (20) weeks of intense air service messaging.

The second phase of the Community Outreach Advertising will be developed based on the results of the first campaign and funding for the subsequent phase is included in the proposed FY 2017-18 Budget.

(b) Continue to work with the Regional Air Service Corporation (RASC) and the local community to develop risk mitigation resources (i.e. marketing and/or funding) to bring new air service to RNO.

While the RTAA is limited by FAA policy regarding use of its funds in support of new air service, the RASC and its partners have been able to provide the following:

 Promotion through all partner databases (locally and out of market)  Promotion through all partner social media channels and websites  Promotion through all partner marketing/public relations programs  Financial purchase of advertising both locally and out of market  Air carrier risk mitigation

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The RASC offers a marketing resource that no other community can match - a consortium that spreads across industries (tourism, hotel, gaming, ski, etc.) to promote air service and the region.

(c) Bring airline representatives to the Reno-Tahoe region as guests to showcase the area through the use of private invitations, Air Service 101 participation, special event attendance and more. The goal is to host twenty-two (22) airline representative visits to the Reno-Tahoe region.

(d) Continue on-going aggressive airline marketing to attract new and maintain existing air service including:

 Hold eight (8) meetings with existing passenger airlines with market analysis and local economic updates.  Present at least thirty-five (35) market analyses of new routes and supporting market data.  Hold at least one meeting with the existing three (3) cargo carriers outlining air cargo opportunities.  Package RTAA incentives and marketing support with community derived resources focused on risk mitigation to pursue new opportunities.

(e) Provide funding for an additional and Border Protection officer to reduce processing times to enter the United States by international passengers.

On December 16, 2016, the Cross-Border Trade Enhancement Act was signed into law by President Obama. This law gives the RTAA the opportunity to participate in a U.S. Customs and Border Protection (CBP) program that allows the Airport to reimburse the government for up to five additional full-time CBP officers.

With recent acceptance of the RTAA into this program, the RTAA will have the ability to cut passenger wait times at the custom’s checkpoints, thus providing a better experience for existing passengers and to encourage new international flights.

In accordance with the FAA's Policy and Procedures Concerning the Use of Airport Revenue, RTAA revenue may only be used for the following:

1. Financial Incentives such as airport fee reductions and fee waiver. 2. Acceptable promotional costs, where the purpose is to encourage an air carrier to increase service at the airport.

Under the FAA policy, the financial incentive is limited to one year for new service to markets currently being offered to Reno-Tahoe passengers and up to two years for service to a new

23 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 1 – Introduction

destination. The RTAA must make the incentives available to all similarly situated air carriers and the cost of providing the incentives cannot be included in the rate base for the other air carriers without their expressed permission. The current air service incentive policy, adopted by the Board, limits all financial incentives to one year with a six months “on”, six months “off” structure.

The FAA allows promotional incentives to air carriers for new service to (a) increase travel using the airport and/or (b) promote competition at the airport. Incentive programs may not be designed for the purpose of promoting general economic development and cannot take the form of a direct payment of airport revenue to a carrier or to any provider of goods and services to that carrier.

The following are acceptable promotional costs available to the RTAA under FAA policy:

 The full costs of activities directed at promoting competition at an airport.  Public and industry awareness of airport facilities and services.  New air service and competition at the airport (other than direct subsidy of air carrier operations).  A share of promotional expenses such as marketing, advertising, and related activities designed to increase travel using the airport.

Current levels of marketing support permitted under the Board approved Air Service Incentive Policy consist of the following:

1. $25,000 - Targeted marketing support for passenger airline commencing new non-stop service from RNO to destinations without existing non-stop service. 2. $25,000 - Targeted marketing support for new passenger airlines commencing service from RNO. 3. $25,000 - Targeted marketing support for new dedicated all-cargo air carriers commencing service from RNO.

The proposed FY 2017-18 Budget has forecasted $400,000 in fee waivers and $1.236 million in air service development and promotional costs eligible under FAA guidelines.

Master Plan – Reno Tahoe International Airport (RNO)

On October 27, 2016, the RTAA held a RNO Master Plan Press Conference to announce the 16- month master planning process that will address airport growth, aviation industry changes, and Federal Aviation Administration (FAA) standards.

An airport master plan is a study that provides a 20-year comprehensive guide for future airport development, which satisfies aviation demand in a fiscally feasible manner. The framework for

24 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 1 – Introduction

an airport master plan begins with a documented inventory of existing features and conditions, followed by development of a FAA approved forecast, which leads directly into an analysis of the inventory to identify which, if any, airfield, terminal, and/or landside facilities will not meet the forecasted demand. Once those deficiencies have been identified, alternative solutions are evaluated before agreement is reached on a preferred capital improvement plan. The capital improvement plan is then supported with an implementation strategy and financial plan.

Airport master plans are not required by the FAA. They are, however, recommended by the FAA and are a consideration in terms of grant assurance obligations. The last airport master plan for RNO was completed in 1991.

On September 8, 2016, the FAA awarded an AIP grant of $1.875 million to the RTAA, which represents 93.75% of the project budget of $2.0 million. The local share required of the RTAA of $125,000 will be funded using Passenger Facility Charges.

A Master Plan Working Group (MPWG) has been established, which includes twenty-four (24) members, which represent various key stakeholders who are integral in goal setting and subsequent review of inventory, forecasts, alternatives, and the ultimate development concept. The MPWG is expected to have significant impact on the direction of the master plan and the future long-term development of RNO.

In addition, the RTAA will conduct eleven (11) Community Listening Sessions, aka Town Halls, to engage and collect feedback from specific groups and organizations within the community. In some cases, Community Listening Sessions will focus on specific issues or areas of RNO. For instance, the Regional Transportation Commission of Washoe County would likely be asked to participate in a Listening Session focused on ground transportation, transit, and city roadway access to/from the Airport. Additionally, some of the Community Listening Sessions will focus on specific demographics such as seniors, millennials, business travelers, etc.

RTAA staff will be fully engaged in conducting this planning effort in FY 2017-18. With preliminary results scheduled to be available toward the end of 2017, this effort will be critical in establishing future facility needs as the Northern Nevada economy grows and will provide critical information as the Board of Trustees goes forward with its strategic planning efforts.

Land Development – Reno Tahoe International Airport (RNO)

With the 2015 success of the third legislative effort to abate sales and use tax on aircraft and aircraft parts, Nevada is no longer at a competitive disadvantage. Aviation manufacturers and Maintenance, Repair, and Overall (MRO) firms located in Nevada or considering relocating to Nevada will operate in a tax environment competitive with 45 other states that offer abatements or exemptions.

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With this achievement, the Board of Trustees adopted new RNO General Aviation Commercial Minimum Standards on December 8, 2016 to attract aviation businesses and private sector capital to RNO aeronautical land. In FY 2017-18, staff will continue to market vacant property and, depending upon market demand, may issue Request for Proposals and/or enter into due diligence on one or more vacant parcels.

In addition, the RTAA executed a ground lease with JMA Reno Holding, LLC (JMA) on February 28, 2017 for an Aloft Hotel at the Gateway Center located at the southwest corner of Plumb Lane and Terminal Way. The lease will be for fifty (50) years for approximately 3.0 acres on the northern portion of the property and an exclusive three (3) year option to lease approximately 4.5 acres south of the Hyatt Place.

JMA is proposing to develop the vacant land with a two-phased, master plan approach. JMA believes a “Master Planned Center” (Center) is critical for the success of the entire Gateway Center, including the existing Hyatt Place Hotel. JMA’s vision includes a mixture of hotels, Class A office space, and the right mix of restaurant(s) that create an energy and vitality to stand alone.

As the first phase of the Center development, JMA will construct the Aloft Hotel. This hotel will be operated under an agreement with Marriot International, Inc. (formerly Starwood). This firm owns, operates, franchises and manages hotels, resorts, spas, residences, and vacation ownership properties under its 11 owned brands.

The Aloft Hotel will be a four- to five-story, non-gaming property with 168 rooms and a common social area, courtyard, pool and a W XYZ Bar. This specialty bar will be the hub of the hotel designed to encourage guests to mix, meet, and mingle over music and cocktails. JMA believes this concept will fill an untapped market segment by appealing to the younger (Millennial) traveler. This traveling demographic also aligns with the growth in high technology companies in Reno-Tahoe such as Apple, Switch and Tesla.

During FY 2017-18, RTAA staff will be assisting JMA to obtain site plan approvals and meet other regulatory requirements necessary to begin construction. Once construction is scheduled to begin, the RTAA may elect to enter into a contract for construction management services to inspect construction due to the size and importance of this development on RTAA land.

In addition to the JMA development, the RTAA will see significant financial benefits in FY 2017-18 from the 50-year agreement with Atlantic Aviation for Fixed Base Operator (FBO) services at RNO originally executed in 2013 and amended in 2015. Under this agreement, Atlantic invested approximately $15 million in a new FBO/Hangar facility, apron rehabilitation and a fuel storage facility at their existing site.

26 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 1 – Introduction

As part of this agreement, Atlantic Aviation agreed to purchase two box hangars located on its leasehold, whose ownership reverted to the RTAA on July 1, 2017, for $1.85 million plus an investment of $200,000 in refurbishments. In addition, the ground rent was established at fair market value on July 1, 2017 as compared to the rent established under the previous FBO agreement originally executed in 1987.

Land Development – Reno Stead Airport (RTS)

As outlined earlier in the section titled “Industrial Real Estate Market Improvement”, the RTAA owns approximately 37% or 2,400 total acres of the vacant industrial lands in Washoe County and 60% of the City of Reno land zoned for industrial or mixed use. As such, RTAA has been focused on improving the utilization of vacant land at RTS to attract aeronautical and non- aeronautical companies.

To address growing interest, the RTAA in early 2016, upon approval of the Board of Trustees, completed a competitive process, executed a Memorandum of Understanding (MOU), negotiated and completed a Master Development Agreement, and executed a ground lease for Phase 1 of 90 acres with Dermody Properties, doing business as DP RTA Stead, LLC (DP).

The formal award to DP to serve as the exclusive master real estate developer and to execute a 50-year Phase 1 Ground Lease at RTS was approved and adopted by the Board of Trustees on December 8, 2016.

Dermody Properties is a national developer of industrial and commercial properties having been ranked among the 10 largest privately held industrial developers in the nation. Since 1960, the company has developed over 35 million square feet of industrial space including parks, speculative facilities, and build-to-suits for lease or purchase.

Development is managed through each of DP’s regional offices located in Philadelphia, Chicago, Phoenix, Portland, and the corporate headquarters in Reno. The company has over 300 international, national and regional customers, many of whom are the country’s most respected companies.

Through this Public Private Partnership, the RTAA and DP have master planned 1,700 acres into an airport centric business park (Project), which includes the on-going National Championship Air Races (Air Races). However, should the Air Races discontinue the annual event, DP intends to fold the remaining undeveloped RTS land, for an estimated total of 3,000 acres, into the Project.

Upon execution of the Master Development Agreement and Ground Lease, the first critical step is for DP to obtain funding of the first phase of off-site and on-site infrastructure estimated to be approximately $7.5 million, which includes $5 million to construct the Gateway Entrance off-site

27 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 1 – Introduction

improvements and $2.5 million to construct Phase I on-site improvements. To fund the costs of this infrastructure, DP will seek funding from State and/or Federal sources and the conditions under Phase I Ground Lease are contingent and conditional on DP securing infrastructure by June 30, 2018.

With the execution of the ground lease, DP affirmed its commitment to make good faith efforts toward obtaining the infrastructure funding.

Based on research and experience in the Reno-Sparks region, as well as national experience, DP believes that the RTS will become a Class “A” master planned, high-tech, airport-centric business park that serves as one of the premier economic development opportunities in Northern Nevada.

The size and importance of this development effort will require a systematic, prudent and cooperative approach by all parties and RTAA staff in FY 2017-18 will be actively involved in assisting and supporting the master developer in its effort to market RTS, fund infrastructure and attract tenants.

Unmanned Aircraft Systems

During 2016, RTAA staff worked with the National Aeronautics and Space Administration (NASA) to conduct testing of NASA’s Unmanned Aircraft Systems (UAS) Traffic Management (UTM) software. The most extensive testing and a NASA press conference were held in late October 2016. During this test, five drones flew beyond the line-of-sight of their operators while testing the planning, tracking and alerting capabilities of NASA’s UTM platform. This was a critical step in developing technology and procedures for safe UAS air traffic management.

In May 2017, additional NASA testing was held including over six (6) flying days, eighty (80) flights, and five (5) drone companies – Amazon Prime Air, Del Air Tech, Carbon Autonomous, and two Reno-based companies: Flirtey and Drone America. Not only did the test flights push data to the NASA traffic system, but also began flights Beyond Visual Line of Sight (BVLOS) of the pilot and conducted actual supply drops with parachutes. In addition to the flying companies, four (4) sensor companies tested electronic detect-and-avoid systems.

The testing culminated with a press event on May 25, 2017, which was held in partnership with the NASA and the Nevada Institute for Autonomous Systems (NIAS). News media covered the debut event that included demonstrations of flight tests performed to blend drone traffic with the air traffic system utilized by manned aircraft, inside the actual FAA designated test site at RTS.

Going into FY 2017-18, RTAA staff will continue to provide operational support to the UAS testing efforts. In conjunction with this effort, staff will be building relationships with UAS companies and working with the Governor’s Office of Economic Development (GOED), NIAS,

28 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 1 – Introduction

regional economic development partners and Dermody Properties to promote development at RTS.

With President/CEO Marily Mora appointment to the Drone Advisory Committee (DAC), the RTAA, who is one of only two airport representatives on the 35-member committee, will be establishing contacts and promoting opportunities at RTS for testing and developing future UAS technology.

The proposed FY2017-18 Budget has established approximately $260,000 in support of operational testing support and marketing of UAS development at RTS.

Budget Process

The RTAA, a quasi-municipal corporation, must comply with the Local Government Budget Act, Nevada Revised Statute (NRS) 354 as stipulated in the enabling legislation that created the RTAA (Chapter 474, Statutes of Nevada, 1977, as amended (the "Authority Act"). The Local Government Budget Act defines the RTAA’s fiscal year as July 1 through June 30.

The RTAA’s day-to-day operating and maintenance expenses are funded almost exclusively from revenues generated through cost recovery from the airlines, rents and concession fees paid by airport tenants, and the RTAA operation of public parking facilities. No state or local property or sales tax dollars are used to meet RTAA’s obligations.

The RTAA is solely responsible to ensure its financial stability and viability. Despite the volatility of the last decade, it has been a top priority to ensure financial stability, maintain a solid credit rating and to position the RTAA with the flexibility to strategically respond to challenges and opportunities.

The statutory requirements are summarized in the table below. Subsequent changes to the budget are made through the adoption of a resolution by the RTAA’s Board of Trustees, which is then submitted to the Nevada Department of Taxation for approval.

Statutory Date Calendar Date Action None April 13, 2017 and Public Budget Workshops with May 18, 2017 the RTAA Board of Trustees April 15th April 15, 2017 Tentative budget filed with the Nevada Department of Taxation Seven to 14 days before the May 9, 2017 Notice of Budget Public Hearing Third Thursday in May published Third Thursday in May May 18, 2017 Hold Public Hearing On or Before June 1st May 18, 2017 Adopt Budget

29 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 1 – Introduction

The budget process begins in early December with a statement of the goals and priorities communicated to staff for the next budget year. Staff begins the budget process by reviewing the expenditures of the first five months of the then current fiscal year. A budget packet is distributed which includes a budget calendar, forms and general directions for each department’s budget submittal.

RTAA utilizes a zero-based budget process in which each expenditure line item is evaluated on its own merit each year. Staff has developed work plans to implement the adopted FY 2014- 2018 Strategic Plan with its focus on achievement of the strategic priorities and meeting the guiding principles/operating practices.

Specific department budgets are then developed to identify resources necessary to achieve the strategic priorities, while meeting the daily functions of operating the airports and implementing the necessary airport improvement projects.

The President/CEO and the Executive Vice-President/COO evaluate each department’s initiatives and conduct a line item review of the Budget before the proposed draft is completed and submitted for the Board of Trustee’s review.

Revenue Bond Resolution

The RTAA's revenue bond resolutions contain provisions that impact the annual budget in regards to the calculation of airline landing fees and rents. Net pledged revenues, gross revenues less operating expenses, must exceed the revenue bond debt service requirement for the fiscal year by 25%.

The FY 2017-18 budgeted net pledged revenues for repayment of the outstanding senior lien bonds is 446% above the debt service requirements for the fiscal year, which significantly exceeds the 25% minimum required.

As of July 1, 2017, the RTAA will have repaid all outstanding 2011 subordinate lien notes originally issued in the amount of $20.350 million. This will reduce annual debt service payments, after the application of Passenger Facility Charges, by approximately $1.325 million starting in FY 2017-18. RTAA debt and associated annual debt service is further explained in the Debt Service Summary section of this document.

Planning for the Future

The RTAA strives to maintain its reputation for efficiency this year. This budget reflects a dedicated effort to keep airline cost per enplaned passenger reasonable, while using staff innovation, technology and carefully targeted contracting to maintain the RTAA’s high standard of customer service.

30 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 1 – Introduction

The RTAA actively plans and prepares for the airport facility needs for both RNO and RTS in order to accommodate future aviation needs. With the strong economic growth and the projected increase in passenger activity, the RNO Master Plan, as previously outlined in the Operating Environment section, will allow the RTAA to anticipate and execute needed improvements in advance of any over congestion situation, which may cause passenger inconvenience.

Currently, RNO has adequate airfield and terminal concourse facilities to support existing passenger levels. No significant changes to the airfield are expected; however there is an on- going planned pavement rehabilitation and reconstruction program in place.

As part of this effort, the RTAA has submitted an application with the FAA on a three phase project to rehabilitate deteriorating pavement, over runs, shoulders, approach lighting system and airfield lighting vault at Runway 16R-34L. This application estimates total program costs of $56 million.

With the completion of terminal building improvements in 2013, significant terminal building and improvements are in place to accommodate current passenger traffic and provide capacity for future growth. As passenger levels increase in the future, the next likely step will be a building expansion including replacement of the existing concourses, expansion of the arrivals (baggage claim) lobby and new customs and border protection facilities.

RNO’s existing 3,700 public parking spaces in the parking garage and the south surface lot reached or exceeded capacity on certain peak travel days in 2007. It is recognized that if passenger traffic returns to previous levels reached prior to the 2008-09 recession, additional parking capacity will be needed. As facility usage grows, the next step will likely require the relocation of the rental car quick-turnaround facilities from the existing parking garage and construction of a north garage extension.

At RTS, the airport has sufficient airfield facilities to support existing and future airport operations. To properly maintain these facilities, the RTAA has invested over $31.3 million in airport improvements over the last 15 years through FY 2015-16. Going forward, RTAA has received FAA grants of $2.482 million to remove existing asphalt and construct concrete pads for aircraft parking and $20.531 million for the reconstruction of Runway 8R-26L.

In addition to the projects referenced above, several on-going programs demonstrate RTAA’s commitment to the environment and the impact of future aviation demand:

 Environmental Programs – RTAA’s environmental programs seek to consistently improve practices and encourage stewardship. Active programs include an in-house environmental committee, an airport-wide recycling program, the Stead Solvent Remediation program, Storm Water Pollution Prevention initiatives, and an Environmental Management System.

31 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 1 – Introduction

 Noise Mitigation and Compatibility Programs – During FY 2014-15, the RTAA closed out the twenty (20) year noise mitigation program that provided sound insulation improvements for eligible residences and public facilities. The RTAA received approximately $70 million in federal grants, disbursed in twenty-two (22) phases, to mitigate aircraft noise impacts in our community. As of December 31, 2014, a total of 5,128 residences and 3 public schools received sound insulation program improvements.

In addition to this program, RTAA continues its commitment to the noise compatibility program, which focuses on education and community outreach through the Airport Noise Advisory Panel, the airport website, an English and Spanish language noise complaint hotline and a FAA-funded permanent noise and operations monitoring system.

Budget Document Structure

The budget document is composed of twelve sections:

Section 1: Introduction – Describes the RTAA and provides an outlook on the national and regional economy, an overview of the air service and air cargo markets, and a presentation of the key operating environment factors impacting in the FY 2015-16 Budget Section 2: Executive Summary – Overview and Summary of key financial results Section 3: Strategic Initiatives Section 4: Organization Guide – An operational guide detailing personnel and staff organizational structure Section 5: Financial Plan – Financial narratives and policies as well as explanations of revenue and expense budgets Section 6: Revenues – Explanation of the revenue budget Section 7: Expenditures – Explanation of the expense budget Section 8: Capital Budget – Property, Plant and Equipment and Capital Project program Section 9: Debt – Detail of outstanding debt Section 10: Supplemental Data – Narratives and charts of local economic activity, airport and airline activity and financial performance Section 11: State of Nevada budget form Section 12: Glossary of airport industry terms

Conclusion

While staff is focused on the strategic priorities, RTAA management also remains proactive and steadfast in our efforts to meet the Guiding Principles/Operating Practices. In particular, the following areas remain our primary operational focus:

32 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 1 – Introduction

 Safety and Security. It is our first and foremost responsibility.

 Customer Service. RTAA has a long history of excellent customer service by delivering a high level of facility cleanliness, communication, and hospitality.

The RTAA strives to maintain its reputation for efficiency this year. This budget reflects a dedicated effort to keep airline cost per enplaned passenger reasonable, while using staff innovation and technology to maintain the RTAA’s high standard of customer service.

Acknowledgments

The Government Finance Officers Association of the United States and (GFOA) has presented a Distinguished Budget Presentation Award to the RTAA every year since 1997. In order to receive this award, a governmental or quasi-municipal unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communications device.

RTAA staff is dedicated to building on the long tradition of excellence in financial reporting and budgeting. RTAA staff believes the adopted budget continues to conform to program requirements, and the Finance and Budget department will submit the FY 2016-17 Budget to GFOA to determine its eligibility for another award. This document will also be posted on the RTAA’s website, www.renoairport.com.

The RTAA Board of Trustees adopted this budget on May 18, 2017. The preparation of this document would not be possible without the hard work, dedication to detail, and accuracy of the Finance and Budget Section staff.

Respectfully submitted,

Marily M. Mora, A.A.E. President/CEO

33 GOVERNMENT FINANCE OFFICERS ASSOCIATION Distinguished Budget Presentation Award PRESENTED TO Reno-Tahoe International Airport Nevada For the Fiscal Year Beginning July 1, 2016

i(OcgrA0490aarx,,

Executive Director

34 









   Section 2 – Executive Summary Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 2 – Executive Summary

To help guide the future of the Reno-Tahoe Airport Authority (RTAA), the Board of Trustees (Trustees) in June 2013 approved a Strategic Plan for FY 2013-14 through FY 2017-18. This five-year plan serves as a guide to staff as it faces an ever-changing aviation industry and economic cycles. The plan was created through a public process that invited participation from airport committees, user groups, Trustees, staff and the public.

The FY 2017-18 Budget summarized below is focused on the achievement of the following strategic initiatives:

1. Increase Air Service Development

2. Optimize General Aviation Operations and Services

3. Expand Cargo Development and Service

4. Facilitate Economic Development at both Airports

5. Provide a Positive Environment and Experience for All

A detail discussion of the Strategic Plan is provided in Section 3 of this report.

The budget also takes into account requirements of the Guiding Principles outlined in the Strategic Plan, the Revenue Bond Resolution, various contractual agreements including the airline use and lease agreement, and the RTAA’s obligations under state and federal law.

The following summary provides a financial overview of the budget for the RTAA’s 2017-18 fiscal year, which begins on July 1, 2017 and ends June 30, 2018.

Airline Activity Forecast

RTAA has based its revenue budget on a forecast of solid growth in passenger enplanements (passengers an aircraft) of 1,948,002, an increase of 2.0%, as compared to the FY 2016- 17 actual results and an 8.1% increase from the prior year adopted budget.

The following table compares the enplaned passenger traffic used to develop the proposed FY 2017-18 Budget as compared to FY 2015-16 and FY 2016-17 actual results.

35 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 2 – Executive Summary

Reno-Tahoe International Airport Enplaned Passenger Forecast (EPAX) FY 2017-18 Adopted Budget

FY 2016-17 FY 2017-18 Variance to Percent Adopted Budget Proposed Budget Prior Year Change FY 2015-16 1,778,611 1,778,611 Actual Actual FY 2016-17 1,801,291 1,909,187 130,576 7.3% Budget Actual FY 2017-18 1,948,002 38,815 2.0% Budget

Starting in June 2015, the positive economic winds and cumulative efforts of the community and RTAA staff continue to be rewarded with RNO registering twenty-five (25) month-over-month increases in passenger traffic as compared to the prior year.

The signatory airlines of Alaska, Delta, Southwest and United reported approximately 92,700 more enplaned passengers in FY 2016-17 than the same period last year. This increase is partially offset by lower enplaned passengers by American of 14,900.

In addition, the impact of service by RTAA’s non-signatory airlines (Allegiant, JetBlue and Volaris) has resulted in 52,900 additional passengers in FY 2016-17.

This increase in the FY 2017-18 Budget reflects the full year impact and new service announcement of additional non-stop flights from Reno to the following: (1) Orange County, CA; (2) Oakland, CA; (3) Long Beach, CA; (4) San Jose, CA; (5) Denver, CO; (6) Atlanta, GA; (7) Chicago, IL; and (8) Dallas (Love Field), TX.

After the adoption of the FY 2017-18 Budget, the RTAA also learned that Frontier Airlines will be returning to RNO after a ten-year absence. The new service at RNO will begin on Nov. 21, 2017 with three (3) times a week to Denver International Airport (DEN) on an Airbus 320 with 180 seats.

This announcement brings us to a total of nine (9) airlines serving RNO, which is truly impressive for a community of our size.

Going forward into FY 2017-18, the enplaned passenger traffic forecasts reflects both an 8.1% increase above the adopted FY 2016-17 Budget of 1,801,291 and continued solid growth of 2.0% above the actual results achieved in FY 2016-17. This growth is reflected in the revenue estimates outlined in Section 6 Revenues.

36 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 2 – Executive Summary

Aircraft Landed Weight Forecast

The RTAA recovers almost 100% of its net airfield costs through the payment of landings fees. Landing fees are charged to passenger and cargo carriers for each aircraft landing based on the aircraft’s Maximum Gross Landed Weight. Therefore, the higher the landed weight the lower the unit cost for each aircraft landing.

The forecasted landed weight for FY 2017-18 is projected to increase to 2,932,677 (thousand pound units), an increase of 4.4% over the actual results for FY 2016-17 and 176,304 (thousand pound units), or 6.4% above the adopted FY 2016-17 Budget. An increase in airline landed weight impacts the landing fee calculation by increasing the base used to recover airfield costs.

The table below outlines RNO actual passenger and cargo aircraft landed weight, in thousand pounds, along with the forecast incorporated into the FY 2017-18 Budget:

LANDED WEIGHT BY CARRIER

FY 2015-16 FY 2016-17 FY 2017-18 Variance to FY Passenger Actual Actual Variance Budget 2016-17 Actual

Alaska 212,173 234,218 22,045 239,775 5,558 Allegiant 21,866 36,073 14,207 40,403 4,329 American 441,718 409,575 (32,144) 428,013 18,438 Delta 144,923 157,875 12,951 158,484 609 Jet Blue 46,072 87,084 41,012 92,997 5,914 Southwest 873,884 983,684 109,800 1,073,520 89,836 United 245,891 255,760 9,869 253,318 (2,441) Volaris 19,612 23,234 3,622 22,468 (767) Charter and Other 12,489 9,384 (3,105) 2,336 (7,048)

2,018,629 2,196,886 178,257 2,311,314 114,427

Cargo Federal Express 329,884 339,683 9,799 350,075 10,392 UPS 225,495 238,302 12,807 236,462 (1,840) Other Cargo 25,954 33,808 7,854 34,826 1,018

581,334 611,794 30,460 621,363 9,569

Total 2,599,963 2,808,680 208,717 2,932,677 123,997

Percent Change 8.0% 4.4%

37 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 2 – Executive Summary

Financial Summary

The FY 2017-18 Budget forecasts the airport system will generate $9.026 million in net revenue or discretionary funding to the RTAA, an increase of $4.319 million or 92% compared to the prior year budget. This net revenue will be deposited to the General Purpose Fund for the use in funding future capital improvements and maintaining prudent liquidity reserves.

The table below provides a summary level comparison of the FY 2016-17 Budget, the updated FY 2016-17 Mid-Year Forecast, and the FY 2017-18 Budget.

NET REVENUE FY 2016-17 FY 2016-17 FY 2017-18 Budget Budget Mid-Year Budget Variance Forecast Total Operating Revenue Before Revenue Sharing $48,579,589 $49,989,344 $52,530,135 $3,950,546

Non-Operating Revenues 1,902,900 2,031,300 4,042,700 2,139,800 Total Revenue Before Revenue Sharing 50,482,489 52,020,644 56,572,835 6,090,346

O & M Expenditures (40,290,571) (39,617,350) (42,100,139) (1,809,568)

Debt Service After PFCs (3,575,878) (3,576,066) (2,247,300) 1,328,578

Net Available Revenue 6,616,040 8,827,229 12,225,396 5,609,356

Revenue Sharing - Airline Share (972,631) (1,698,176) (2,167,382) (1,194,751)

Net Revenue to RTAA 5,643,409 7,129,052 10,058,014 4,414,605 Net Funding Committed to Rental Car Facilities (936,600) (1,002,500) (1,032,294) (95,694)

Net Revenue to RTAA $ 4,706,809 $ 6,126,552 $ 9,025,720 $ 4,318,911

Revenue Forecast

Total Revenues are composed of Operating Revenues, after application of the net airline revenue sharing credit, and Non-Operating Revenues. In the FY 2017-18 Budget, Total Revenue is forecasted to be $54,405,435 ($56,572,835 - $2,167,382), a 9.9% increase above the FY 2016-17 Budget.

38 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 2 – Executive Summary

The table below provides a comparison of the FY 2016-17 Budget, the updated FY 2016-17 Mid-Year Forecast, and the revenue estimate used in the FY 2017-18 Budget:

FY 2016-17 Mid_Year FY 2017-18 Budget Total Revenue Budget Forecast Budget Variance Operating Revenue Airline Fees and Rentals$ 15,710,981 $ 15,172,846 $ 16,130,204 $ 419,223 Non-Airline Revenues 31,896,008 33,118,298 34,232,531 2,336,524

Total Operating Revenue$ 47,606,989 $ 48,291,144 $ 50,362,735 $ 2,755,747

Non-Operating Revenue 1,902,900 2,031,300 4,042,700 2,139,800

Total Revenue $ 49,509,889 $ 50,322,444 $ 54,405,435 $ 4,895,547

The proposed Total Operating Revenue budget for FY 2017-18 is $50,362,735. This represents a 5.8% increase above the FY 2016-17 Budget. The Operating Revenues are summarized in two major categories:

 Airline related revenues, which for FY 2017-18, are anticipated to be $16,130,204 or approximately 32% of the total operating revenues.

Revenues attributed to the passenger and cargo airlines are in the form of landing fees and terminal building rents. The passenger airline derived revenue per enplaned passenger is forecasted to decrease from $7.65 in the FY 2016-17 Budget to $7.23 in the FY 2017-18 Budget.

 Non-Airline Revenues represent $34,232,531 or approximately 68% of the FY 2017-18 of the Total Operating Revenues.

The major non-airline revenue sources are the following: (1) Public Parking Revenues; (2) Rental Car Concessions; (3) Terminal Concessions including Gaming, News and Gift, and Food and Beverage; (4) Reimbursed Services associated with cost recovery of maintenance of the new (BHS), and (5) various Building, Hangar, and Land rents.

Detailed highlights of the FY 2017-18 budgeted increases in Total Operating Revenues, as compared to the FY 2016-17 budget and updated forecast are as follows:

39 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 2 – Executive Summary

40 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 2 – Executive Summary

Airline Revenues

The airline agreement, discussed in further detail in Section 5 Financial Plan, sets forth the rate setting formula by which airlines pay for the facilities and services they use. The RTAA currently operates under a five (5) year airline agreement and business arrangement that went into effect on July 1, 2015. The FY 2017-18 Annual Budget was developed based on the business arrangement specified under this agreement.

The total FY 2017-18 Airline Revenues are forecasted to be $16,130,204, an increase of $419,223 or 2.7% over the FY 2016-17 Budget. This reflects higher cost recovery in the airline cost centers.

Landing Fee

Pursuant to the airline agreement, landing fees are determined by the cost recovery requirements in the Airfield Cost Center. Landing fees are charged to passenger and cargo carriers for each aircraft landing based on the aircraft’s Maximum Gross Landed Weight. Total landing fee revenue is estimated to be $8,568,704 in FY 2017-18, an increase of $1,078,423 or 14.4% above the FY 2016-17 Budget and $1,026,858 or 13.6% above the FY 2016-17 Mid-Year Forecast.

The FY 2017-18 signatory landing fee of $2.99 per thousand pounds of landed weight reflects an increase of $0.20 from the prior year budget of $2.79.

The following are factors impacting the requirements in the Airfield Cost Center and the calculation of the landing fee in the FY 2017-18 Budget:

 For FY 2017-18, the RTAA is forecasting landed weight of 2,932,677 thousand pounds, an increase of 6.4% from the FY 2016-17 approved budget and 4.6% over the current updated forecast. The increase is primarily due to increased passenger flights from Alaska, Allegiant, JetBlue, Southwest and United.

 The operation and maintenance costs allocated to the Airfield Cost Center are projected to increase 5.9% over the prior year budget. This increase is due primarily to the overall increase of the direct and indirect operating budget assigned to the airfield.

 Fixed assets and capital projects cost recovery of $687,400 represents an increase of a combined $503,600 from the FY 2016-17 Budget and $398,000 from the current year updated forecast. This increase reflects a proposed investment in a regenerative air

41 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 2 – Executive Summary

sweeper and two vehicles for Airfield Maintenance and access road reconstruction at 170.

Indirect or administrative cost allocations are assigned under the airline agreement based on actual or budgeted costs identified to the six direct cost centers (Airfield, Terminal, BHS, Ground Transportation, Other and Reno Stead Airport).

The detailed landing fee rate calculation and variance analysis appears in Section 6 Revenues.

Terminal Rental Rate

Terminal rentals reflect cost recovery of terminal costs allocated to airline occupied facilities (compensatory basis) with total facility costs divided by rentable terminal square footage. The average terminal rental rate is calculated as the difference between the Total Requirement, composed of operation and maintenance (O&M) expenses, debt service requirements and capital expenditures, the airline reimbursements and the airlines’ portion of the revenue sharing, divided by rentable terminal space.

The Revenue Sharing Credit is calculated as 50% of the gross revenues less O&M expenses, debt service requirements, bond ordinance reserve requirements, repayment of loans to the capital account, special fund and amortization requirements. The remaining 50% of the airport system net revenues is transferred to the RTAA’s general purpose fund.

Rentable Terminal Space is the total area of the terminal building available for lease and dedicated to the sole use of the airlines, rental car companies, concessions, aviation service providers, various government agencies, and the RTAA for purposes of generating revenue and supporting operations. This rentable terminal space square footage is divided into the net terminal cost to calculate the rental rate in the airline agreement.

Total terminal space rental revenue is estimated to be $7,561,500 in FY 2017-18, a decrease of $659,200 or 8.0% as compared to the FY 2016-17 Budget and $69,500 or 0.9% below the FY 2016-17 Mid-Year Forecast.

An average terminal building rental rate is set pursuant to the airline agreement, based on the requirements of the Terminal Building Cost Center. The following are factors influencing the calculation of the Terminal Building rental rate:

 The operation and maintenance budget allocated to the Terminal Building is increasing 2.5% above the FY 2016-17 Budget. This increase is due primarily to the overall increase of the direct and indirect operating budget assigned to the terminal building.

42 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 2 – Executive Summary

 The increase in direct costs primarily reflects higher salaries and benefits for existing employees in Airport Operations, , and Building Maintenance.

 Fixed assets and capital projects of $709,700 are increasing a combined 61.9% from the FY 2016-17 Budget and 29.8% from the current year updated forecast. This increase reflects a proposed investment of two vehicles and floor scrubber for Building Maintenance, upgrades to the identity management and security training systems, security camera replacements, building system upgrades and jet carpet replacement.

 The proposed airline’s portion of net revenue sharing for FY 2017-18 is $2.167 million, an increase of $1.195 million or 122.8% above the prior year budget. This increase reflects the growth in revenues due to strong passenger growth outpacing higher operating expenses.

The detailed terminal building rental rate calculation and variance analysis appears in Section 6 Revenues.

Non-Airline Revenue

Total Non-Airline operating revenues are forecasted to be $34,232,531 in FY 2017-18 Budget. This represents an increase of $2,336,524 or approximately 7.3% from the FY 2016-17 Budget.

For FY 2017-18, the RTAA is forecasting a 2.0% increase in enplanements to 1.948 million as compared to FY 2016-17 actual results of 1.909 million and an 8.1% increase as compared to the FY 2016-17 Budget of 1.801 million.

The largest increase is in public parking/ground transportation of $1,217,900. In addition, rental car concession revenues are forecasted to increase by $603,700 and RNO Non-Terminal Building and Land rent is forecasted to increase by $483,800.

A detailed breakdown of FY 2017-18 non-airline revenue appears in the Section 6 Revenues.

Non-Operating Revenue

The proposed budget for Non-Operating Revenue for FY 2017-18 is $4,042,700, an increase of $2,139,800 or 112.4% above the FY 2016-17 Budget and $2,011,400 or 99.0% above the updated FY 2016-17 Mid-Year Forecast.

43 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 2 – Executive Summary

This significant increase primarily reflects a one-time gain on the sale of two box hangars to Atlantic Aviation for $1.85 million in FY 2017-18. These hangars reverted to RTAA ownership on July 1, 2017 due to the expiration of a lease agreement originally executed in 1987.

In addition, the three other major components of Non-Operating Revenues are as follows:

 Customer Facility Charge (CFC) Revenues, implemented in August 2012, are forecasted to be $1,493,900 in FY 2017-18. CFC revenues are derived from a $1.25 fee assessed to each rental car transaction day. These fees are dedicated to funding property management, repairs, and improvements to RTAA-owned rental car facilities.

 Investment Interest for FY 2017-18 is budgeted at $422,400, a 54.7% increase compared to the FY 2016-17 Budget and an increase of 31.2% as compared to the updated FY 2016-17 Mid-Year Forecast. This increase is due to slightly higher earning balances and an increase in anticipated earning rates on investments.

 Aviation Gas Tax is budgeted at $276,400 in FY 2017-18 Budget, an increase of $17,600 or 6.8% above last year’s budget. This tax is collected by Washoe County in the form of fuel tax of one cent per gallon of fuel for jet or turbine-aircraft sold, distributed or used per Nevada Revised Statute 365.170.

Operation and Maintenance Budget

With significant improvement in passenger traffic and total revenues forecasted to increase next year by approximately $4,467,327 or 9.0%, the operations and maintenance budget, including property, plant, and equipment, is $43.192 million, which represents an increase of $2,366,587 or 5.8% above the adopted FY 2016-17 Budget.

The following table provides an overview of the adopted budget as compared to the prior year budget:

FY 2016-17 FY2016-17 FY2016-17 Budget Expense Category Adopted Mid-Year Adopted Variance Budget Forecast Budget Personnel Services $27,282,682 $27,135,790 $28,843,415 $1,560,733 Utilities and Communications 2,942,950 2,660,400 2,741,145 (201,805) Purchased Services 5,322,685 5,079,354 5,731,568 408,883 Materials and Supplies 1,848,975 1,884,955 1,949,869 100,894 Administrative Expenses 2,893,279 2,856,851 2,834,142 (59,137) Property, Plant, and Equipment 534,857 806,188 1,091,876 557,019 Total Expenses and PPE $40,825,428 $40,423,538 $43,192,015 $2,366,587

44 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 2 – Executive Summary

The following are key drivers and major initiatives incorporated into the FY 2017-18 budget submission:

Personnel Services

The FY 2017-18 Budget for Personnel Services of $28,843,415 reflects an increase of approximately $1,560,700 or 5.7%. The increase is comprised of the following major changes:

1. Employee salaries and overtime are proposed to increase by approximately $966,900 or 5.3%. This increase reflects current collective bargaining agreements and civil service and management guidelines.

2. Employee benefits, excluding retirement, are projected to increase by approximately $363,000 or 9.3% due primarily to the estimated cost increase for health insurance and worker’s compensation.

3. Retirement contributions are projected to increase by $230,800 or 4.6%. The current contribution rates under the Employer-pay Contribution Plan are 28.0% for regular employees and 40.50% for Police/Fire members. These rates are established by the Public Employee Retirement System (PERS) based on an actuarial valuation report. The PERS contribution rate is unchanged from FY 2016-17.

45 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 2 – Executive Summary

Utilities and Communication

The Utilities and Communications budget includes electricity, water, and natural gas. The FY 2017-18 Budget is 6.9% or approximately $201,800 below the FY 2016-17 Budget and an increase of 3.0% or approximately $80,700 over the updated FY 2016-17 forecast.

Purchased Services

The FY 2017-18 Budget for Purchased Services is increasing 7.7% or approximately $408,900 above the FY 2016-17 Budget. The increase reflects higher Professional service as follows:

 Rental Car Ready Return Parking/Traffic Reconfiguration Study of $50,000  Strategic Plan Update of $35,000  Air Service Studies of $50,000  Customer Satisfaction Survey and Economic Impact Study of $40,700  Investment Advisory Service of $37,500  Wildlife Hazzard Assessment of $77,200

The FY 2017-18 Budget also contains funding of one-half year of a Customs and Border Protection (CBP) officer of $87,500 through a new Reimbursable Services Program. This addition to CBP staff is to reduce processing times by international passenger to enter the United States.

This program was made possible by the Cross-Border Trade Enhancement Act signed into law by President Obama on December 16, 2016. This law gives the RTAA the opportunity to reimburse the U.S. Government for up to five additional full-time CBP officers.

Materials and Supplies

The FY 2017-18 Budget for Materials and Supplies is 5.5% or approximately $100,900 above the FY 2016-17 Budget.

The increase in Materials and Supplies is primarily due to the following:

 Access Control and Monitoring System (ACAMS) parts of $10,000  Computer hard drive replacement of $20,400  Employee safety equipment of $18,500  Medical supplies of $15,100  LED Light Replacement of $15,000  Other Supplies and Materials of $15,800

46 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 2 – Executive Summary

Administrative Expenses

The FY 2017-18 Budget for Administrative Expenses is decreasing 2.1% or approximately $59,400 below the FY 2016-17 Budget and a decrease of approximately $22,700 or 0.8% below the updated FY 2016-17 forecast.

This decrease is primarily due to lower airport liability insurance of $52,600 or 5.1% from the FY 2016-17 Budget.

Personnel Complement

The total budgeted and/or authorized positions for FY 2017-18 is 277.5 positions, which is an increase of five positions as compared to the adopted FY 2016-17 Budget. A specific explanation of the changes, any frozen positions and the personnel complement by section is provided in Section 4 Organizational Guide.

Debt Service

Total debt service for FY 2017-18 is budgeted to be $2,247,300, a decrease of $1,328,578 or 37.2% below the FY 2016-17 Budget. This reduction is due to the final maturity of the 2011 Subordinate Lien Airport Revenue Notes (2011 Subordinate Notes) on July 1, 2017.

With this debt retirement, the annual debt service in the FY 2017-18 Budget solely reflects the Airport Revenue Refunding Bond, Series 2015 with total outstanding senior lien debt on July 1, 2016 will be $17,720,000 after the scheduled July 1, 2017 principal payment.

The 2015 Bond reflects the remaining outstanding debt from the 1996 bonds issued to construct the RTAA’s three story, 2,400 space parking garage, a new terminal access roadway system to accommodate the parking garage, and a passenger to connect the parking garage to the terminal.

RTAA debt is limited by the outstanding bond resolution requirement that Net Pledged Revenues (gross revenues of the Airport System less operating expenses) pledged to pay debt service must exceed 125% of annual senior lien debt service.

In addition, the RTAA subordinate lien debt is limited by Pledged Revenues for Subordinate Debt (gross revenues of the Airport System less operating expenses less the debt service requirement on existing and future senior lien debt outstanding) pledged to pay subordinate lien debt service must exceed 110% of annual existing and future subordinate lien debt service.

47 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 2 – Executive Summary

The following table outlines the estimated debt service coverage that meets the requirements outlined above:

DEBT SERVICE COVERAGE FY 2016-17 FY 2016-17 FY 2017-18 Budget Forecast Budget Total Revenue Before Revenue A $ 50,482,489 $ 52,020,644 $ 56,572,835 Sharing O & M Expenses B (40,290,571) (39,617,350) (42,100,139) Transfers (a) C (316,715) (332,220) (2,192,195) Net Pledged Revenue A+B+C= $ 9,875,203 $ 12,071,074 $ 12,280,501 D Debt Service (Senior Debt) E $ 2,249,463 $ 2,249,463 $ 2,247,300 Debt Service Coverage D/E 439% 537% 546% (Senior Debt) Net Pledged Revenue for D-E=F $ 7,625,740 $ 9,821,611 $ 10,033,201 Subordinate Debt Pledged PFC Revenue G $ 1,812,216 $ 1,812,790 $ 0 Pledge Revenue for Subordinate F+G=H $ 9,437,956 $11,634,401 $ 10,033,201 Debt Debt Service (Subordinate Notes) I $ 3,138,631 $ 3,139,393 $ 0 Debt Service Coverage H/I 301% 371% (Subordinate Debt)

(a) Per the Bond Resolutions, the following transfers are provided prior to debt service coverage: (i) 35% of Gaming Revenue and (ii) Gain or Loss on Sale of Capital Assets.

If the minimum senior lien coverage requirement is not met, the airline landing fee and rental rates will need to be increased until net revenues equal 125% of the senior bond debt service or 100% of all debt service, whichever is greater.

A complete explanation of the outstanding senior lien bond is provided under Section 9 – Debt.

Property, Plant and Equipment (PP&E)

A Property, Plant and Equipment (PP&E) item is an asset with a useful life exceeding one year and a cost greater than $5,000. The total PP&E request for FY 2017-18 is $1,091,876. This is an increase of $567,019, or 104.1% above the FY 2016-17 PP&E Budget.

The major PP&E requests consist primarily of computer server replacement, security and badging system upgrades, interactive employee training system, an asphalt crack sealing machine, seven (7) vehicles, an air sweeper and a floor scrubber.

48 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 2 – Executive Summary

The specific items requested are presented under the Section 8 - Capital Budget tab.

Capital Projects

The FY 2017-18 Capital Projects for RNO and RTS of $5.190 million are funded by RTAA internally generated and other local funds (primarily the general purpose fund, the special fund and the rental car customer facility charges (CFC)). See Section 5 Financial Plan – Bond Resolution Trust Funds for additional detail.

This budget request represents an increase of $1.426 million above the FY 2016-17 Budget. Capital Projects are primarily to provide new infrastructure or maintain the existing infrastructure, such as pavement maintenance and facilities used by rental cars. The largest of these projects is the $1.133 million rehabilitation of the access roads to the RTS Terminal Building and $635,000 to replace carwash equipment in the ready return building.

Of the total budget, $999,900 is allocated to the Airfield Cost Center with $382,400 being recovered in FY 2017-18 through landing fees.

The project costs applicable to the Terminal Building Cost Center of $345,000 are included in the calculation of the FY 2017-18 terminal building rent rates.

Any remaining capital project costs, whether assessed 100% in FY 2017-18 or amortized over the asset useful life, will impact airline terminal rents indirectly through lower net revenue sharing.

The Majority in Interest (MII) threshold, as defined in the airline agreement, excludes $1 million in the Airfield Cost Center, $2 million in the Terminal Building Cost Center, $500,000 in the Baggage Handling System Cost Center. Therefore, an MII ballot associated with the proposed capital projects was not necessary.

A detailed list of the projects is provided under the Section 8 - Capital Budget tab.

Revenue Sharing Credit

All revenues are assigned to a cost center (Airfield, Terminal, Baggage Handling, Ground Transportation, Other and Reno Stead Airport) with expenses netted against revenues for the cost center. In the airline agreement, fifty percent of the RTAA’s net revenues (pledged revenues less operating expenses, debt service, and other requirements) for the Fiscal Year are applied to reduce signatory airlines terminal rental rate in the current fiscal year.

49 Reno-Tahoe Airport Authority FY 2017-18 Annual Budget Section 2 – Executive Summary

The remaining 50% of the RTAA’s net revenues for the year are transferred to the General Purpose Fund.

Prior to calculation of the net revenue sharing credit, 35% of gaming revenues in each fiscal year are retained by the RTAA and not available as part of the reduction in the signatory airline terminal rental rate.

The net revenue available to be shared with the signatory airlines for 2017-18 is budgeted to be $4,334,800 as compared to $1,945,200 in the FY 2016-17 Budget. Per the airline agreement, half of this amount is credited to the Terminal Building Cost Center in the year earned.

The FY 2017-18 increase of approximately $2.390 million reflects approximately $4.012 million or 8.1% in higher total revenue offset by approximately $1.601 million or 4.0% in higher operating expenses. In addition, revenue sharing is reduced by $1.103 million or 56.1% in higher cost recovery associated with fixed assets and capital projects.

A detailed breakdown of the calculation is included in the Section 5 – Financial and Budgetary Policies tab.

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   Section 3 – Strategic Initiatives and Budget Goals Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 3 – Strategic Initiatives

The Reno-Tahoe Airport Authority (RTAA) operates two of the most important economic catalysts for our region- the Reno-Tahoe International Airport (RNO) and the Reno-Stead Airport (RTS). Together, these airports generate $2 billion in annual economic impact for the region.

RTAA’s airports bring travelers to and from our businesses, distribution centers, manufacturing facilities, casinos, ski resorts, and families. In addition, RTAA provides facilities and services critical to air cargo transportation and provides a base of operations for the Nevada Air National Guard, general aviation, and the National Championship Air Races. The RTAA is committed to providing the region with the highest level of services and facilities, while positioning the airports to be a catalyst for further economic growth.

Mission Statement

To maintain and grow aviation services and facilities as part of the global air transportation system, to people and goods to benefit the region while being financially self- sustaining.

Vision Statement

Our vision is to develop and operate a system of airports that support our region’s economic growth and provide safe, convenient, and customer-focused facilities. This will create a positive experience for those who work at and travel through our airports.

Five Strategic Priorities

To help guide the future of the RTAA, the Board of Trustees has approved a Strategic Plan for FY 2013-14 through FY 2017-18. It is a five-year guide, with the flexibility and forethought to assist staff in maneuvering through an ever-changing aviation industry. It was created through a public process that invited participation from airport committees, user groups, the board, staff and the public.

With the current Strategic Plan expiring on June 30, 2018, the proposed budget includes funding for a consultant to facilitate the Trustee’s update or modification of this plan. The proposed update schedule is designed to enable the Trustees to have preliminary recommendations and findings of the long-term Master Plan effort prior to the plan update.

The RTAA Board of Trustees and staff, through the Strategic Plan process, established a vision for the future with an emphasis on five (5) Strategic Priorities. The Priorities focus on elements the Board deem critically important to the long-term viability of the RTAA with maintaining existing and adding new air services a priority that transcends all others. In addition, RTAA

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Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 3 – Strategic Initiatives intends to further develop air cargo, optimize general aviation services, and expand and diversify non-airline revenue sources. This focus on business development, however, is impossible without a fundamental focus on customer service and creating a positive airport experience for our customers, tenants, and employees.

Five Strategic Priorities

Strategic Priorities – Detailed View

The five strategic priorities provide the framework for the strategic direction of the RTAA over the next several years. With a holistic focus across the whole organization, the strategic priority explanations below further clarify the intent of how the RTAA will achieve its vision:

1. Strategic Priority – Increase Air Service

The Reno-Tahoe region’s ability to create demand and sustain it is what will ultimately result in more air service. The RTAA will continue to actively engage in the activities essential to build and sustain airline service, in partnership with business, community, government and other regional stakeholders.

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Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 3 – Strategic Initiatives

Rationale: The RTAA’s airports exist to provide aviation services and facilities to benefit the community; air service is also vital to generating local economic growth. Having a vibrant and efficient airport with a wide array of flights and services is essential when trying to attract new businesses, operations, and events to the region.

Strategic Direction/Shift: The airline industry is changing and shifting to prioritize routes that are most profitable. This means that airport operational costs need to remain low (direct impact to the airlines) and planes need to be full. Commercial flights are targeted at an 80% capacity/load factor. This translates to the notion of full flights before new flights; if current routes are not meeting profitability standards, new flights to the region will not be considered.

Long-Term Goals: Our strategic efforts to build and sustain air service are focused around a three-prong approach to: (1) provide an attractive environment for airline partners through main- taining low cost operations; (2) strengthened relationships with existing air carriers and marketing/partnership efforts to promote and maintain current air service; and (3) new air service development and retention strategies to stimulate demand and sustain it.

Additionally, public safety and security is always a #1 focus for RTAA and initiatives around providing safe/secure facilities and operations are also tied into our Air Service strategy.

2. Strategic Priority – Optimize General Aviation Operations and Services

General Aviation (GA) includes all civil aviation operations other than scheduled passenger and cargo airline service. General aviation flights are conducted for pleasure, private business and public services that need transportation more flexible than the airlines can offer. GA also provides access points to small towns and rural communities across the state/region that does not have commercial air service.

Rationale: General Aviation is a key contributor to regional economic growth and development; it supports business growth not only from this region but to this region through Maintenance Repair Operations (MRO’s), Fixed Based Operators (FBO’s), etc. RTAA values General Aviation as an integral component of the airport system and its ability to thrive.

Strategic Direction/Shift: General Aviation services and infrastructure are critical to the overall success of the RNO and RTS. It is the RTAA’s strategic priority to optimize General Aviation operations and services at both airport locations and facilitate third-parties to take advantage of the demand to support a thriving General Aviation community. At the same time, the RTAA supports and recognizes the important balance between growing the GA community at RTS and the National Championship Air Races - both of which have local economic impact. RTAA initiatives to optimize General Aviation include encouraging a variety of FBO contracts and

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Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 3 – Strategic Initiatives

other service vendors; attracting jet service centers and maintenance/repair facilities and optimizing the GA customer service experience to attract/retain General Aviation activity.

Long-Term Goals: RTAA’s strategic efforts to expand general aviation at both airports are focused on the following: (1) support a vibrant GA community through optimizing the GA customer service experience; (2) encourage RNO GA support through use of service vendors (such as FBOs, MROs, etc.); and (3) encourage RTS GA support through use of service vendors (such as FBOs, MROs, etc.).

3. Strategic Priority – Expand Cargo Development and Service

Air cargo, or goods transported by aircraft, serves as a key engine of economic growth and development for the RTAA and the region. Air cargo development is a significant revenue generator and creates a positive domino effect throughout the region as it relates to local business opportunity and economic impact.

Rationale: Air cargo promotes connectivity, creates new business potential, and supports the region’s natural advantages, positioning the area as a regional distribution point.

It also shows diversification of the business sector and provides new business potential to the area. Specifically, as cargo increases to the region, storage and ground transportation demands increase, creating opportunity for industrial warehousing.

Strategic Direction/Shift: Cargo is a direct revenue generator providing additional financial security and income to offset the RTAA’s needs. It also has a positive trickle-down effect throughout the region.

It is the RTAA’s strategic priority to enhance existing cargo support services to retain current cargo volume, while also focusing to actively grow cargo development and helping to position the region as a West Coast distribution point. Cargo development provides the RTAA and region with great opportunity for economic growth and international expansion.

Long-Term Goals: RTAA’s strategic efforts to expand cargo development are focused on the following: (1) maintain existing cargo support service to retain current cargo volume; (2) position the region as a West Coast distribution point by actively growing cargo development at RNO; and (3) continue to optimize infrastructure to address market demand in a cost-effective manner.

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Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 3 – Strategic Initiatives

4. Strategic Priority – Facilitate Economic Development at both Airports

Enhancing long-term financial stability and remaining self-sufficient is a foundational strategy for the RTAA. While direct airline rates and charges contribute approximately 34% of the revenue stream, the remaining 66% are generated by non-airline sources such as parking fees, rent collected from airport tenants, rental car and terminal concessions, hangar and land leases, etc.

Rationale: RTAA business development and revenue diversification is vital to long-term growth and financial stability. Understanding that the airports are a conduit to regional economic growth—this also results in positive impact to the region.

Strategic Direction/Shift: Both the RNO and RTS present unique economic development opportunities including new business activities through development of vacant land. It is the RTAA’s strategic priority to diversify the revenue portfolio, facilitate airport land development at both locations, and support necessary investments to ensure our vital assets serve the region as expected.

Long-Term Goals: RTAA’s strategic efforts to facilitate economic development at both airports include the following: (1) facilitate airport land development and airport owned building occupancy to optimize and diversify the revenue portfolio at RNO; (2) facilitate airport land development and airport owned building occupancy to optimize and diversify the revenue portfolio at RTS; (3) launch, market, and lease the new RTS Terminal; (4) maximize all existing non-airline revenue at both airports (parking, concessions, rental cars, etc.) to optimize and diversify the revenue portfolio.

5. Strategic Priority – Provide a Positive Environment and Experience for All

RTAA’s airports make the ultimate first and last impression when people come to the region; it is the RTAA’s goal to continue a positive environment and influence a favorable, lasting impression on everyone who visits, works at and utilizes both airports.

Rationale: First-class customer service is part of the RTAA’s DNA and it is a goal to continue an environment reflective of the service-oriented culture. Satisfied customers are the hallmark of a healthy and vibrant airport and RTAA staff is committed to continually enhancing the customer experience as well as the organizational environment.

Strategic Direction/Shift: The RTAA views everyone that uses the airport as a customer, inclusive of airline passengers, air service partners, vendors, General Aviation users and local business/community members. The RTAA’s goal is to enhance the holistic customer experience for all stakeholders. This includes continually improving customer convenience and supporting hospitality for all customers.

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Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 3 – Strategic Initiatives

In addition, the RTAA recognizes that the organizational team is the foundation of maintaining a world-class airport. In order to stay proactive in a changing industry, it is critical to invest in people while enhancing the organizational environment. This will be accomplished through a focus on training and innovation to strengthen the professional development, skills and abilities of the RTAA staff and the Board of Trustees, maintaining and enhancing the positive RTAA environment and organizational values, and fostering a collaborative and supportive working relationship between staff and the Board of Trustees.

Long-Term Goals: RTAA’s strategic efforts to promote a positive environment and experience for all include the following: (1) continually improve customer convenience and service, support hospitality along with welcoming all customers; (2) continue to strengthen the professional development, skills and abilities of the RTAA staff and Board of Trustees; (3) encourage employees to stay engaged in industry changes, demands, best practices and strategic shifts; (4) foster trust and continue to build a collaborative, supportive environment between staff and the Board of Trustees; and (5) maintain and enhance the RTAA environment and organizational values.

Guiding Principles/Operating Practices

Along with the above Strategic Priorities, the RTAA is committed to key Guiding Principles/ Operating Practices that guide our everyday efforts.

1. Operational Efficiency and Facility Development – RTAA will continually strive to maintain and expand aviation services to our region by serving as a catalyst with passenger and cargo airlines, general aviation, and other tenants/partners. Staff is committed to being efficient, responsive and flexible to market demand, while continually evaluating the adequacy of our facility mix to ensure the airports are functional and attractive.

2. Safety and Security – the safety and security of everyone who utilizes our airport facilities is our primary concern.

3. Customer Service – Satisfied customers are the hallmark of a healthy and vibrant service organization and RTAA staff is committed to ensuring that all customers receive the very best service possible. The RTAA views everyone who enters our airport environment as a customer worthy of our best service effort whether they are airline passengers, vendors, or general aviation users.

4. Financial Integrity – RTAA will do all we can to ensure the financial stability of the airports under our control and staff is committed to honesty and transparency in all of our financial transactions.

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Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 3 – Strategic Initiatives

5. Professionalism and Ethics – RTAA values and respects the contribution each individual makes to the success of our endeavors. Each employee is held to a standard of professionalism and ethical behavior that is respectful and supportive of one another. Our organization will always benefit from a commitment to teamwork between staff and the Board of Trustees and the RTAA recognizes and values the contribution vendors and service providers make to our airports.

6. Environmental Responsibility – RTAA is committed to environmental awareness and protection. Our staff will strive to develop policies and procedures that minimize the impact of airport operations on the natural environment and our organization supports and pursues environmentally sustainable aviation business practices.

FY 2017-18 Budget – Resource Identification

In order to achieve the goals of the Board directed Strategic Initiatives, staff identified resources needed to implement the work plan as outlined. This included the engagement of consultants with subject matter expertise in the areas of transportation, airports, law, general aviation, airlines and tourism.

In addition, consultants may be needed with expertise in economic analysis and planning, marketing, and strategic advocacy. In many cases, the resources identified crossed several different departments and functional operational areas within the RTAA.

The following table outlines resources identified in the FY 2016-17 Budget, the updated FY 2016-17 Mid-Year Forecast, and the FY 2017-18 Budget specifically dedicated to the achievement of the Strategic Priorities:

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Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 3 – Strategic Initiatives

STRATEGIC PRIORITIES AND WORK PLAN RESOURCES

1. Strategic Priority – Increase Air Service * 3. Strategic Priority – Expand Cargo Development and Service *

 Due to the overlap of resources dedicated to these two related Strategic Priorities, the work plan resources have been combined.

Strategic Plan Priorities- Resource Funding FY 2016-17 FY 2016-17 FY 2017-18 Budget Mid-Year Budget Analysis

Air Service Conference Sponsorship $100,000 $100,000 $10,000 Air Service Sponsorship - SWA Deck Party - 36,000 - Air Service Data Base Information 30,000 30,000 30,000 Air Service Development- Community Training 10,000 10,000 15,000 Air Service Development Staff 470,100 345,700 399,200 Air Service Studies 50,000 100,000 100,000 Air Service Marketing/ Incentive 104,800 104,800 112,500 Community Air Service Outreach Program 180,000 180,000 200,000 CBP - Customer Service Program 20,000 15,000 19,000 CBP - Additional Officer - - 87,500 Other Advertising and Promotion 20,000 20,000 20,000 New Air Service Promotion and Events 55,000 55,000 33,000 Regional Air Service Corporation 50,000 50,000 50,000 Sierra Ski Marketing Council 60,000 60,000 60,000 Staff Travel/ Airline Meetings and Conference 60,500 60,500 94,900 Registration Web Site Maintenance - Air Service Focus 6,000 6,000 5,000 Airline Incentive -Waiver of Airline R&Cs 400,000 400,000 400,000

$ 1,616,400 $ 1,573,000 $ 1,636,100

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Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 3 – Strategic Initiatives

2. Strategic Priority – Optimize General Aviation Services and Operations

FY 2016-17 FY 2016-17 FY 2017-18 Budget Mid-Year Budget Analysis

Capital Project -RNO- Gate 215 Relocation $55,000 $55,000 - Capital Project -RNO- West Gutter Installation 15,000 15,000 - Capital Project -RNO- Tenant Restroom Facility 60,000 60,000 - Capital Project -RNO- Hangar 10 Drainage 80,000 80,000 - Capital Project -RNO- GA East T-Hangar Roof 25,000 25,000 - Capital Project -RTS- Hangar #6 Lighting 48,500 48,500 - Capital Project -RNO- Asphalt Taxi-lanes - 95,153 - Capital Project -RNO- Asphalt South T-Hangar - - 218,600 Capital Project -RTS- Hangar #6 Lighting - - 48,500 Capital Project -RTS- Window Replacement - - 38,600 Capital Project -RTS- Wash Bay Restroom - - 16,900 Capital Project -RTS- Terminal Access Road - - 1,132,800 GA Hangar/Asphalt Maintenance/Repairs 262,200 183,900 233,900 GA Marketing/Customer Service 8,500 8,500 5,400 National Championship Air Race Sponsorship 127,000 127,000 100,000

$ 681,200 $ 698,053 $ 1,794,700

4. Strategic Priority – Facilitate Airport Economic Development

FY 2016-17 FY 2016-17 FY 2017-18 Budget Mid-Year Budget Analysis

Airport Economic Development Staff $ 998,000 $ 998,000 $ 1,113,400 Capital Project -RNO- Mini Warehouse Roof 130,800 130,800 - Capital Project -RNO- AVA 2 Building Impr. - 18,600 - Capital Project -RNO- Mini Warehouse- Cameras - 9,600 - Capital Project -RNO- Asphalt- AA/BB Building - 85,000 - Capital Project -RNO- Asphalt- CC Building - - 200,000 Capital Project -RNO- Air Cargo Way Drainage - - 86,000 Market Research and Business Development 50,000 50,000 50,000 Economic Impact Study - - 25,000 Unmanned Aircraft Systems (UAS) Marketing 38,800 53,500 28,500 UAS Test Site- Operations Support 230,400 135,700 230,400

$ 1,448,000 $ 1,481,200 $ 1,733,300

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Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 3 – Strategic Initiatives

5. Strategic Priority – Provide a Positive Environment

FY 2016-17 FY 2016-17 FY 2017-18 Budget Mid-Year Budget Analysis

Art Program $ 4,250 $ 4,250 $ 4,000 Community Outreach 53,750 53,750 67,708 Customer Satisfaction Survey 19,000 19,000 22,500 Human Resources/ Public Relations Staff 1,430,500 1,436,600 1,539,400 Incentive/Service Awards 31,700 31,700 36,700 Organizational Training /Tuition Reimbursement 113,600 113,600 98,000 $ 1,652,800 $ 1,658,900 $ 1,768,308

TOTAL STRATEGIC PRIORITIES FUNDING $ 5,398,400 $ 5,411,153 $ 6,932,408

FY 2017-18 Budget Percentage Increase of 28.4% $ 1,534,008

The adopted FY 2017-18 Budget reflects the on-going commitment of RTAA resources of $6.932 million, an increase of $1,534,600 or 28.4% above the prior year budget, is dedicated to the accomplishment of the strategic priorities outlined above.

Department Responsibilities and Initiatives

In Section 7 - Expenditures, each department within the RTAA is discussed in detail, including its mission statement, key responsibilities, a progress report on initiatives outlined in the adopted FY 2016-17 Budget and new FY 2017-18 Budget initiatives.

Each of the department initiatives are linked to the Strategic Priorities and Guiding Principles outline in this section. The department initiatives are the specific work plan and key steps RTAA staff is undertaking to achieve the strategic priorities adopted by the Board of Trustees.

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   Section 4 – Organization Guide Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 4 – Organization Guide

The Reno-Tahoe Airport Authority (RTAA) is a quasi-municipal corporation that was created by the Nevada State Legislature in 1977 and began operation on July 1, 1978. The nine-member Board that governs the RTAA is appointed by the City of Reno, City of Sparks, Washoe County and the Reno Sparks Convention and Visitors Authority.

Listed below are the Board of Trustees and their appointing entities:

TRUSTEE NAME REPRESENTING TERM EXPIRES Shaun Carey, Chair City of Sparks June 2019 Lisa Gianoli, Vice-Chair Washoe County June 2019 Jenifer Rose, Treasurer City of Reno June 2019 Carol Chaplin, Secretary Reno-Sparks Convention & Visitors Authority June 2021 Nat Carasali Washoe County June 2021 Daniel Farahi City of Reno June 2021 Richard L. Jay City of Reno June 2021 Jessica Sferrazza City of Reno June 2019 Art Sperber City of Sparks June 2021

FY 2017-18 PERSONNEL COMPLEMENT The Personnel complement following this narrative shows the total approved staff complement. Listed below are the changes to the complement approved during the budget process. The organization chart in this section also shows the departments, names of the department heads and the number of employees in each of the departments.

ADDITIONS OR CHANGES

The following reflects either position changes that have been made to more accurately reflect the duties and responsibilities of the position or additions to staff:

PRESIDENT/CEO

Airport Economic Development The Property Specialist - Paralegal position has been reclassified as a Contract Specialist.

EXECUTIVE VICE-PRESIDENT/COO

Technology and Information Systems The Director of Technology and Information Systems has been reclassified as the Chief Information Officer.

61 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 4 – Organization Guide

Technology and Information Systems The Telecommunications Technician position has been reclassified as a Network Administrator.

Human Resources The Director of Human Resources position has been reclassified as the Vice-President of Human Resources.

FINANCE AND ADMINISTRATION

Purchasing and Materials Management This department is increasing by a Buyer position. This position will obtain goods and services and coordinate the bidding of RTAA purchase orders and service contracts.

OPERATIONS AND PUBLIC SAFETY

Airside Operations An Operations Supervisor position has been reclassified as an Airport Duty Manager.

Airside Operations An Airport Communication Training and TAC Specialist position has been reclassified as an Airport Communication Specialist I/II.

Airside Operations This department is increasing by an Airport Communication Supervisor position. The new position will provide dedicated supervision to the Airport Communication Specialists and alleviate the demand on existing Operations Supervisors.

Airside Operations This department is also increasing by an additional Airport Communication Specialist position. The additional position is needed due to an increase in the duties, responsibilities and workload of the Airside Operations and Communication department. In the past few years, there have been quantitative changes in the workload including the monitoring and usage of additional cameras and higher number of daily activities revolving around National Information Center (NCIC), Computer-aided Dispatch (CAD), Security Identification Display Area (SIDA) badge checks, mass notifications and customer calls and paging.

62 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 4 – Organization Guide

Landside Operations The Landside Operations department is increasing by a Landside Supervisor position. The new position will provide dedicated supervision to manage staff in the performance of their duties and on-going training.

Airport Police The Police Corporal position has been reclassified as a .

Airport Security This department is increasing by a Security Supervisor position. The new position will provide dedicated supervision to manage staff in the performance of their duties and on- going training.

Airport Security An Airport Security Specialist position has been reclassified as a Lead Security Specialist.

FACILITIES AND MAINTENANCE

Vice-President of Facilities and Maintenance The Director of Facilities and Maintenance position has been reclassified as a Vice- President of Facilities and Maintenance.

Vice-President of Facilities and Maintenance The Facilities Project Manager position has been reclassified as a Senior Facilities Project Manager.

Airfield Maintenance Some Airfield Maintenance Technician positions have been reclassified as Airfield Technician V.

Airfield Maintenance The Senior Grounds Maintenance Worker position has been reclassified as an Airfield Landscape Technician IV.

Airfield Maintenance The Grounds Maintenance Worker position has been reclassified as an Airfield Landscape Technician III.

63 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 4 – Organization Guide

Airfield Maintenance The Equipment Mechanic positions have been reclassified as two Airfield Equipment Mechanic Technician IV and one Airfield Technician IV.

Airfield Maintenance The Airfield Maintenance Electrician positions have been reclassified as two Airfield Electrician Technician IV and one Airfield Technician IV.

Airfield Maintenance The Automotive Technician position has been reclassified as an Airfield Automotive Technician III.

Airfield Maintenance The Airfield Maintenance Worker I/II positions have been reclassified as Airfield Technician I, II, III.

Building Maintenance A Facilities Supervisor position has been reclassified as an Assistant Facilities Superintendent.

Building Maintenance The Building Maintenance Technician positions have been reclassified as Facilities Maintenance Technician I, II, and III.

Building Maintenance The Building Maintenance Worker I/II positions have been reclassified as one Facilities Technician IV, two Facilities Maintenance Technician IV and three Facilities Maintenance Technician V.

Building Maintenance An HVAC Plant Operator position has been reclassified as a Facilities HVAC Plant Operator IV.

Building Maintenance The HVAC Technician positions have been reclassified as a Facilities HVAC Technician IV.

Building Maintenance The Building Maintenance Electrician positions have been reclassified as one Facilities Maintenance Technician I, II, and III and two Facilities Electrician Technician IV. .

64 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 4 – Organization Guide

VACANT POSITIONS

Various vacant positions shown in the personnel complement have been frozen by the President/CEO and are not funded in the FY 2017-18 Budget for personnel services.

The President/CEO may unfreeze various positions throughout the fiscal year depending on workload factors and/or need to optimize the skill mix of the RTAA as other positions become vacant or other budget savings present themselves.

65 FY 2017-18

Reno-Tahoe Airport Authority Board of Trustees Fennmore Craig Jones Vargas General Counsel

Marily Mora President/CEO Brian Kulpin 2 Positions Rebecca Venis Tina Iftiger Vice-President of Marketing 328-6402 Patrick North Manager of Air Service Vice President of Airport and Public Affairs Senior Internal Auditor Development and Marketing Economic Development 7 Positions 2 Positions 10.5 Positions 328-6401 Hasaan Azam Manager of Air Service & Dean Schultz Cargo Business Development Executive Vice- 5 Positions President/COO 328-6401 2 Positions 328-6412

James McCluskie Mark Cameron David Pittman Brian Moore Mike Scott VACANT Rick Gorman Marty Mueller Vice-President of Planning, Interim Vice-President of Vice-President of Facilites & Vice-President of Human Manager of Reno-Stead UAS Coordinator/Project Chief Financial Officer Engineering and Operations and Public Safety Maintenance Chief Information Officer Airport Manager 15 Positions Resources Environmental Management 102 Positions 100 Positions 7 Positions 7 Positions 1 Position 328-6432 5 Positions 12 Positions 328-6403 328-6681 328-6573 328-6573 328-6456 328-6469

Tom Nelson Dave Lazo Anthony Osendorf Bill Heath 66 Manager of Engineering & Chief of Airport Rescue Facilities Superintendent Manager of Finance Firefighters Construction

Leah Williams Carrie Guedea Scott Harkema Dan Bartholomew Manager of Accounting Interim Landside Operations Airfield Superintendent Manager of Planning/GIS Manager

Joyce Humphrey Jamie Edrosa Manager of Airside Ted Ohm Manager of Purchasing & Facilities Project Manager Materials Management Operations/ Communications

Robert Vester Loretta McNabb Chief of Airport Police Special Projects Manager

Romona Fisher Manager of Airport Security Reno-Tahoe Airport Authority FY 2017 - 18 A N N U A L B U D G E T

Personnel Complement

Budgeted Budgeted Budgeted and/or and/or and/or Authorized Authorized Authorized FY 2015-16 FY 2016-17 FY 2017-18

Board of Trustees * 9.0 9.0 9.0

Board of Trustees Division 2.0 2.0 2.0

President/CEO Division 23.5 24.5 24.5

Executive Vice President/COO Division 22.0 22.0 22.0

Finance and Administration Division 14.0 14.0 15.0

Operations and Public Safety Division 97.0 98.0 102.0

Planning and Engineering Division 12.0 12.0 12.0

Facilities and Maintenance Division 100.0 100.0 100.0

TOTAL AIRPORT (Does not include the appointed 270.5 272.5 277.5 Board of Trustees)

* Appointed positions

67 Reno-Tahoe Airport Authority FY 2017 - 18 A N N U A L B U D G E T

Personnel Complement

Budgeted Budgeted Budgeted and/or and/or and/or Authorized Authorized Authorized FY 2015-16 FY 2016-17 FY 2017-18 Board of Trustees Division Board of Trustees * 9.0 9.0 9.0

Internal Audit Section Senior Internal Auditor 1.0 1.0 1.0 Internal Auditor 1.0 1.0 1.0 Total Internal Audit Section 2.0 2.0 2.0

Total Board of Trustees Division 2.0 2.0 2.0

President/CEO Division President/CEO 1.0 1.0 1.0 Executive Assistant 1.0 1.0 1.0 Total President/CEO 2.0 2.0 2.0

Air Service Business Development Section Vice-President of Air Service Development 1.0 1.0 1.0 Manager of Airline Business Development 1.0 1.0 1.0 Manager of Air Service Development & Marketing 0.0 1.0 1.0 Aviation Analyst 1.0 0.0 0.0 Marketing Coordinator 1.0 1.0 1.0 Executive Assistant 1.0 1.0 1.0 Total Air Service Business Development Section 5.0 5.0 5.0

Marketing and Public Affairs Section Vice-President of Marketing and Public Affairs 1.0 1.0 1.0 Manager of Marketing 1.0 0.0 0.0 Marketing Coordinator 2.0 3.0 3.0 Marketing Coordinator - Graphics Design 0.0 1.0 1.0 Manager of Public Affairs and Customer Service 1.0 1.0 1.0 Project Technician 1.0 0.0 0.0 Receptionist 1.0 1.0 1.0 Total Marketing and Public Affairs Section 7.0 7.0 7.0

Economic Development Section Vice-President of Airport Economic Development 1.0 1.0 1.0 Supervisor of Real Estate 1.0 1.0 1.0 Senior Manager of Properties 1.0 1.0 1.0 Economic Development Manager 1.0 0.0 0.0 Manager of Economic Development 0.0 1.0 1.0 Property Specialist II 2.0 2.0 2.0 Property Specialist I 0.0 1.0 1.0 Property Specialist I - Paralegal 0.0 1.0 0.0 Contract Specialist I 0.0 0.0 1.0 Property Technician 2.0 2.5 2.5

68 Reno-Tahoe Airport Authority FY 2017 - 18 A N N U A L B U D G E T

Personnel Complement

Budgeted Budgeted Budgeted and/or and/or and/or Authorized Authorized Authorized FY 2015-16 FY 2016-17 FY 2017-18 Project Technician 1.0 0.0 0.0 Administrative Assistant I/II 0.5 0.0 0.0 Total Economic Development Section 9.5 10.5 10.5

Total President/CEO Division 23.5 24.5 24.5

Executive Vice President/COO Division Executive Vice-President/COO 1.0 1.0 1.0 Executive/Board Assistant 1.0 1.0 1.0 Total Executive Vice President/COO 2.0 2.0 2.0

Technology and Information Systems Section Chief Information Officer 0.0 0.0 1.0 Director of Technology and Information Systems 1.0 1.0 0.0 Project Manager 1.0 1.0 1.0 Telecommunications Technician 1.0 1.0 0.0 Network Administrator II 1.0 1.0 2.0 Network Administrator I 1.0 1.0 1.0 Database Administrator 1.0 1.0 1.0 Computer Application Specialist 1.0 1.0 1.0 Total Technology and Information Systems Section 7.0 7.0 7.0

Reno-Stead Airport Section Manager of Reno-Stead Airport 1.0 1.0 1.0 Program Technician 1.0 1.0 1.0 Airfield Maintenance Worker I/II 2.0 2.0 2.0 Equipment Mechanic 1.0 1.0 1.0 Airfield Maintenance Technician 1.0 1.0 1.0 Lead Airfield Maintenance Technician 1.0 1.0 1.0 Total Reno Stead Airport Section 7.0 7.0 7.0

Unmanned Aircraft Systems Project Manager 1.0 1.0 1.0 Total Unmanned Aircraft Systems 1.0 1.0 1.0

Human Resources Section Vice-President of Human Resources 0.0 0.0 1.0 Director of Human Resources 1.0 1.0 0.0 Senior Benefits Specialist 1.0 1.0 1.0 Human Resources Specialist 1.0 1.0 1.0 Training Specialist 1.0 1.0 1.0 HR Administrative Assistant 1.0 1.0 1.0 Total Human Resources Section 5.0 5.0 5.0

Total Executive Vice President/COO Division 22.0 22.0 22.0

69 Reno-Tahoe Airport Authority FY 2017 - 18 A N N U A L B U D G E T

Personnel Complement

Budgeted Budgeted Budgeted and/or and/or and/or Authorized Authorized Authorized FY 2015-16 FY 2016-17 FY 2017-18 Finance and Administration Division Accounting and Administration Section Chief Financial Officer 1.0 1.0 1.0 Manager of Accounting 1.0 1.0 1.0 Accountant 1.0 1.0 1.0 Payroll Administrator 1.0 1.0 1.0 Accounting Technician 1.0 2.0 2.0 Project Technician 1.0 0.0 0.0 Administrative Assistant II 1.0 1.0 1.0 Total Finance and Accounting Section 7.0 7.0 7.0

Finance and Budgeting Section Manager of Finance and Budgeting 1.0 1.0 1.0 Senior Financial Analyst 1.0 1.0 1.0 Total Finance and Budgeting Section 2.0 2.0 2.0

Purchasing & Materials Management Section Manager of Purchasing & Materials Management 1.0 1.0 1.0 Senior Buyer 1.0 1.0 1.0 Buyer 0.0 0.0 1.0 Materials Management Supervisor 1.0 1.0 1.0 Materials Control Technician 1.0 1.0 1.0 Warehouse Assistant/Driver 1.0 1.0 1.0 Total Purchasing & Materials Management Section 5.0 5.0 6.0

Total Finance and Administration Division 14.0 14.0 15.0

Operations and Public Safety Division Vice-President of Operations and Public Safety 1.0 1.0 1.0 Operations Specialist 0.0 1.0 1.0 Project Technician 1.0 0.0 0.0 Total Vice-President of Operations and Public Safety 2.0 2.0 2.0

Airside Operations Section Manager of Airside Operations/Communications 1.0 1.0 1.0 Operations Supervisor 7.0 7.0 6.0 Airport Duty Manager 0.0 0.0 1.0 Airport Communications Supervisor 0.0 0.0 1.0 Senior Communications Specialist 1.0 1.0 1.0 Airport Communications Specialist 9.0 8.0 10.0 Airport Communications Training and TAC Specialist 0.0 1.0 0.0 Total Airside Operations Section 18.0 18.0 20.0

Landside Operations Section Manager of Landside Operations 1.0 1.0 1.0 Landside Supervisor 0.0 0.0 1.0

70 Reno-Tahoe Airport Authority FY 2017 - 18 A N N U A L B U D G E T

Personnel Complement

Budgeted Budgeted Budgeted and/or and/or and/or Authorized Authorized Authorized FY 2015-16 FY 2016-17 FY 2017-18 Administrative Assistant I/II 1.0 1.0 1.0 Parking Lot Attendant 9.0 9.0 9.0 Parking Shift Leader 4.0 4.0 4.0 Total Landside Operations Section 15.0 15.0 16.0

Airport Rescue and Fire Section Chief of Airport Rescue Firefighters 1.0 1.0 1.0 Deputy Chief of Airport Firefighters 1.0 1.0 1.0 Fire Captain 3.0 3.0 3.0 Driver/Operator 6.0 6.0 6.0 Fire Fighter 9.0 9.0 9.0 Total Airport Rescue and Fire Section 20.0 20.0 20.0

Airport Police Section Chief of Airport Police 1.0 1.0 1.0 Police Captain 1.0 1.0 1.0 Police Sergeant 4.0 4.0 4.0 Police Corporal 0.0 1.0 0.0 Police Officer 17.0 17.0 18.0 Administrative Assistant II 1.0 1.0 1.0 Total Airport Police Section 24.0 25.0 25.0

Airport Security Section Manager of Airport Security 1.0 1.0 1.0 Security Supervisor 0.0 0.0 1.0 Lead Security Specialist 3.0 3.0 4.0 Airport Security Specialist 13.0 13.0 12.0 Security Compliance Specialist 0.0 1.0 1.0 Project Technician 1.0 0.0 0.0 18.0 18.0 19.0

Total Operations and Public Safety Division 97.0 98.0 102.0

Planning and Engineering Division Planning and Environmental Services Section Vice-President of Planning, Engineering and Environmental Management 1.0 1.0 1.0 Environmental Program Manager 1.0 1.0 1.0 Manager of Planning/Environmental Service 0.0 1.0 1.0 Manager of Airport Noise Program 1.0 0.0 0.0 Manager of Planning/GIS 1.0 0.0 0.0 Airport Senior Planner 1.0 1.0 1.0 Airport Planner II 0.0 1.0 1.0 Airport Noise Analyst 1.0 1.0 1.0 Administrative Assistant III 0.0 1.0 1.0 Program Technician 1.0 0.0 0.0 Total Planning and Environmental Services Section 7.0 7.0 7.0

71 Reno-Tahoe Airport Authority FY 2017 - 18 A N N U A L B U D G E T

Personnel Complement

Budgeted Budgeted Budgeted and/or and/or and/or Authorized Authorized Authorized FY 2015-16 FY 2016-17 FY 2017-18

Engineering and Construction Section Manager of Engineering & Construction 1.0 1.0 1.0 Senior Project Manager 0.0 2.0 2.0 Project Manager 2.0 0.0 0.0 Capital Improvements & Grant Coordinator 1.0 1.0 1.0 Project Manager II 0.0 1.0 1.0 Architectural/Engineering Technician 1.0 0.0 0.0 Total Engineering and Construction 5.0 5.0 5.0

Total Planning and Engineering Division 12.0 12.0 12.0

Facilities and Maintenance Division Director of Facilities and Maintenance Section Vice-President of Facilities and Maintenance 0.0 0.0 1.0 Director of Facilities and Maintenance 1.0 1.0 0.0 Senior Facilities Project Manager 0.0 0.0 1.0 Facilities Project Manager 1.0 1.0 0.0 Construction Manager 1.0 1.0 1.0 Special Projects Coordinator 0.0 1.0 1.0 Project Technician 1.0 0.0 0.0 Special Projects Manager 1.0 1.0 1.0 Total Director of Facilities and Maintenance Section 5.0 5.0 5.0

Airfield Maintenance Section Airfield Maintenance Superintendent 1.0 1.0 1.0 Airfield Maintenance Supervisor 2.0 2.0 2.0 Airfield Maintenance Technician 3.0 3.0 0.0 Airfield Technician V 0.0 0.0 3.0 Equipment Mechanic 3.0 3.0 0.0 Airfield Equipment Mechanic IV 0.0 0.0 2.0 Senior Grounds Maintenance Worker 1.0 1.0 0.0 Airfield Landscape Technician IV 0.0 0.0 1.0 Grounds Maintenance Worker 1.0 1.0 0.0 Airfield Landscape Technician III 0.0 0.0 1.0 Airfield Maintenance Electrician 3.0 3.0 0.0 Airfield Electrician Technician IV 0.0 0.0 2.0 Airfield Maintenance Worker I/II 12.0 11.0 0.0 Airfield Technician I, II, III 0.0 0.0 11.0 Airfield Technician IV 0.0 0.0 2.0 Airfield Automotive Technician III 0.0 0.0 1.0 Automotive Technician 0.0 1.0 0.0 Administrative Assistant I/II 1.0 1.0 1.0 Total Airfield Maintenance Section 27.0 27.0 27.0

72 Reno-Tahoe Airport Authority FY 2017 - 18 A N N U A L B U D G E T

Personnel Complement

Budgeted Budgeted Budgeted and/or and/or and/or Authorized Authorized Authorized FY 2015-16 FY 2016-17 FY 2017-18 Building Maintenance and Services Section Facilities Superintendent 1.0 1.0 1.0 Assistant Facilities Superintendent 0.0 0.0 1.0 Facilities Supervisor 6.0 6.0 5.0 Building Maintenance Technician 7.0 7.0 0.0 Building Maintenance Worker I/II 6.0 6.0 0.0 Facilities Maintenance Technician I, II, III 0.0 0.0 8.0 Facilities Jet Bridge Technician IV 0.0 0.0 1.0 Facilities Maintenance Technician IV 0.0 0.0 2.0 Facilities Maintenance Technician V 0.0 0.0 3.0 HVAC Plant Operator 0.0 1.0 0.0 Facilities HVAC Plant Operator V 0.0 0.0 1.0 HVAC Technician 5.0 4.0 0.0 Facilities HVAC Technician IV 0.0 0.0 4.0 Building Maintenance Electrician 3.0 3.0 0.0 Facilities Electrician Technician IV 0.0 0.0 2.0 Maintenance Scheduler 0.0 0.0 0.0 Maintenance Scheduler/Planner 1.0 1.0 1.0 Facilities & Maintenance Planner 0.0 0.0 0.0 Senior Airport Facilities Custodian 2.0 2.0 2.0 Airport Facilities Custodian 37.0 37.0 37.0 Total Building Maintenance and Services Section 68.0 68.0 68.0

Total Facilities and Maintenance Division 100.0 100.0 100.0

TOTAL AIRPORT (Does not include the appointed 270.5 272.5 277.5 Board of Trustees)

* Appointed positions

73 









   Section 5 – Financial and Budgetary Policies Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 5 – Financial and Budgetary Policies

As a quasi-municipal corporation, the Reno-Tahoe Airport Authority (RTAA) was created by the Nevada Legislature in 1977 to acquire, operate, and finance the Reno-Tahoe International Airport (RNO) and the Reno-Stead Airport (RTS) and related facilities. The RTAA operates financially as a proprietary enterprise fund, which means its method of accounting is similar to private business.

An enterprise fund is an accounting method that utilizes a separate fund for a specific purpose, which in this case is operating an airport system. Enterprise funds are self-sufficient, with the enterprise’s revenues paying the enterprise’s expenses.

Basis of Accounting/Budgeting

Under Generally Accepted Accounting Principles (GAAP), the RTAA’s annual audited financial statement is prepared on the accrual basis. The RTAA’s budget is also presented on the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred.

All transactions are accounted for in a single enterprise fund. Enterprise funds are used to account for activities (a) that are financed and operated in a manner similar to private business enterprises – where the intent of the governing body is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes.

Revenues from landing fees, rents, parking revenue and other miscellaneous sources are reported as operating revenues. Transactions, which are capital, financing or investing related, are reported as non-operating revenues. Passenger Facility Charges and Customer Facility Charges are reported as non-operating revenues. Expenses from employee wages and benefits, purchases of services, materials and supplies and other miscellaneous expenses are reported as operating expenses. Interest expense and financing costs are reported as non-operating expenses.

The bond resolution also prioritizes the flow and use of revenues through a series of accounts held by a third-party trustee. The “funds” mentioned in this document are not the funds used for governmental fund accounting purposes. They are trust accounts monitored and held by a trustee pursuant to the bond resolutions.

Legal Requirements

The enabling legislation, which created the RTAA, requires that the budget process complies with the Local Government Budget Act and the Local Government Purchasing Act enacted by

74 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 5 – Financial and Budgetary Policies

the Nevada State Legislature. The Local Government Budget Act calendar of budget events was mentioned previously in the Introduction Section.

The Local Government Purchasing Act significantly affects the RTAA’s financial operation. This Act controls all government purchasing in Nevada and requires that purchases exceeding $50,000 must be formally bid with notices published in local newspapers. The Act also defines certain exceptions to the required bidding process such as professional services, computer equipment, and insurance.

The RTAA is also subject to the Local Government Law, which defines the process required by local Nevada governments when issuing short and long term debt.

In addition to these state laws, other factors affecting the RTAA’s budget process are the airline agreement and the revenue bond resolutions.

Revenue

The airline agreement, discussed later in this narrative section, establishes the important airline rate setting mechanism for the RTAA. Those formulae for the airline landing fee and terminal rental rates are shown in the following pages. The cost center mechanism of the airline agreement also aids the RTAA in setting other non-airline rates and monitoring the profitability of various business products and services. Most of RTAA’s concession agreements are awarded through a competitive proposal process.

The non-airline concession revenues are also discussed in Section 6 – Revenues.

Airline Agreement

An Airline Agreement is the contract between the airport operator and its tenant airlines that establishes the rights, privileges, and obligations for each party and defines how RNO is to be used by the airlines. In addition, this Agreement also identifies the following:

 Establishes the business arrangement/rate-setting methodology with the airlines;

 Identifies the premises and facilities leased by the airlines and defines the degree of control by the lessee (e.g., exclusively-leased, preferentially-leased, leased in common, etc.);

 Defines the level of control over the expenses at the airport, if any (typically, capital improvement projects are those where the airlines may have some control through a majority-in-interest or similar type provision);

75 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 5 – Financial and Budgetary Policies

 Identifies general party responsibilities and obligations regarding indemnification, insurance, environmental issues, and other governmental inclusion; and

 Establishes six cost centers: Airfield, Terminal Building, Baggage Handling System, Parking and Ground Transportation, Other, and Reno-Stead Airport.

In addition to the above, an agreement symbolizes that the airport operator and airlines have worked together to arrive at a common business relationship.

The two primary rate-setting approaches used in airport-airline business arrangements are the residual and compensatory approaches. A pure residual methodology is where the airlines bear the overall financial risk for the airport operation, and, in turn, receive a significant control over financial decisions. In addition, the airlines receive non-aeronautical revenue as a credit or reduction in rates and charges paid to an airport.

On the opposite end of the spectrum, a pure compensatory rate-making approach is where the airport operator assumes the overall financial risk for the airport operation. As such, the airport operator does not provide any non-aeronautical revenue credits towards the airline rate base and the airlines have limited financial decision making power.

There is also a third approach, generally called a hybrid methodology, that is any mixture or combination of the prior two approaches and may include a “net revenue sharing” component of excess net revenues after debt service (airport system revenues less operating and maintenance costs less debt service) generated at the airport.

Federal law does not require any single approach to airline rate-setting; however, it does require that the methodology used is applied consistently to similar aeronautical users and conforms to the Department of Transportation’s Policy Regarding Airport Rates and Charges.

The RTAA is currently operating under a five (5) year airline agreement and business arrangement that went into effect July 1, 2015.

The current agreement is a hybrid with net airfield costs and associated landing fees established on a cost center residual methodology in which the signatory airlines bear 100% of the financial risk for the airfield. The expenditures, which are primarily comprised of operating expenses, debt service and recovery of capital projects/ equipment with unit costs of less than $300,000, in the Airfield cost center are divided by estimated aircraft landed weight resulting in a landing fee rate.

76 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 5 – Financial and Budgetary Policies

In contrast, the terminal building rental rates reflect a commercial compensatory rate setting formula that places the financial risk of funding terminal building costs with the RTAA. The expenditures, which are primarily comprised of operating expenses, debt service and recovery of capital project/equipment expenditures with unit costs of less than $300,000, in the Terminal Building cost center are divided by a “rentable” space divisor (total terminal space available that is revenue producing and available for lease).

The result of this approach is that the signatory airlines are only responsible for terminal building costs allocated to airline leased premises and any costs allocated to vacant, concession, or other rentable space is the financial responsibility of the RTAA.

In addition, the current hybrid agreement provides that the RTAA’s net available revenues after debt service are split equally (50%-50%) between the signatory airlines and the RTAA through a revenue sharing formula. Revenue sharing is derived by taking the sum of the RTAA’s total revenues less total expenses posted to all costs centers less debt service and other identified requirements. A credit estimate offsets airline terminal building rents collected during the year with a final airline rates and charges reconciliation and settlement prepared based on audited year-end results.

The agreement also provides for an airline review of the budget and allows airlines to vote to deny cost recovery in the airline rates for large capital projects in the airline cost centers. Through negotiations with the airlines, the current agreement provides that the first $1 million of projects in the Airfield Cost Center, $2 million in the Terminal Building Cost Center, and $500,000 in the BHS Cost Center will not be subject to a denial vote. The airlines will review and vote on the projects over these thresholds. Capital projects over $300,000 must be amortized over the useful life of the asset and cannot be included in its entirety in the year it is placed in service.

An annual meeting is held with the signatory airlines to review the budget and further explain the capital projects. The airlines have 30 days after this budget review meeting to deny a capital project. A Majority-In-Interest (MII) of the airlines must vote to deny a project as provided in the airline agreement.

The MII for an Airfield project is 60% of the number of signatory airlines that landed at least 50% of the signatory airline landed weight during the immediate preceding fiscal year or 50% of the number of signatory airlines that landed at least 60% of the signatory landed weight for the same period.

The MII for a Terminal Building project is 60% of the signatory airlines that paid at least 50% of the total terminal rents during the immediate preceding fiscal year or 50% of the signatory airlines that paid at least 60% of the total terminal rents for the same period

77 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 5 – Financial and Budgetary Policies

This type of formula is common in the airport industry to foster a democratic process for the large and small airlines that may have different capital project goals at the airports they serve.

It is difficult to compare landing fees and rental rates at airports because of the variations in rate setting mechanisms contained in airline agreements. One financial indicator used to compare airports is airline cost per enplaned passenger. This is the sum of the airline’s costs to operate at RTIA (landing fees and terminal rents) divided by the number of airline enplaning passengers.

The RTAA budgeted cost per enplanement (CPE) for fiscal year 2016-17 was $7.65 and it is currently forecasted at $7.10. The CPE for FY 2017-18 is budgeted to be $7.23.

The RTAA seeks to maintain a diversified revenue stream with the goal of keeping airline rates, fees, rentals and charges as reasonable as possible. Airline cost per enplanement is equivalent to a municipal or county government cost per capita as a means of comparing different governments’ cost of operation.

Bond Resolution - Trust Funds

To finance capital improvement projects and construct new facilities, the RTAA issues Airport System Bonds that are special, limited obligations of the RTAA paid solely from and secured by Net Revenue (Gross Revenue remaining after the dedication of Operation and Maintenance Expenses) and other funds established by a Bond Resolution. Under the Bond Resolution, the RTAA pledges to deposit its revenues and to fund its operations and required reserve accounts as established through a defined priority basis.

The RTAA has pledged that it will adopt, revise, and continue in effect a schedule of rentals, fees, and charges sufficient to generate revenues in an amount equal to or greater than the sum of 1.25 times the amount of annual requirements on the Outstanding Bonds or 100% of the amount required to be deposited in the various funds and accounts as required by the Bond Resolution.

The RTAA has several funds that accumulate cash and investments for specific and discretionary purposes. From a governmental accounting standpoint, the RTAA is an enterprise fund and various fund accounts are created as provided in bond indenture documents. The RTAA’s funds are not the typical governmental purpose type funds seen in municipal government accounting.

The funds mentioned in this section and their payment priority are established by the RTAA's revenue bond resolution and are not inclusive of all the cash, cash equivalents and investments of the RTAA as reflected on the Statement of Cash Flows in Section 11 - State of Nevada.

78 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 5 – Financial and Budgetary Policies

These funds are common in the airport industry's revenue bond resolutions. The revenue bond resolutions are, in effect, the RTAA's contract with the purchasers of the revenue bonds. This contract specifies how the RTAA will manage its money so that it will have sufficient funds to operate the airport system, and to pay the interest and principal due on the revenue bonds.

There are several funds which are used to handle the daily receipts and disbursements. The funds with the most activity are the Revenue Fund and the Operation and Maintenance Fund. All revenues flow through the Revenue Fund and are distributed as needed to the other funds listed below. All of these funds will remain in place until the RTAA’s revenue bonds are repaid. The funds are listed in order of their priority.

The Operation and Maintenance Fund is the highest priority. The expenses to operate the airport system are paid through this fund account before any other transfers to lower priority funds. The operating budget of the RTAA flows through this fund.

In the Resources Applied by Organizational Unit page located in the Section 7 – Expenditures section, this fund account is represented by the total operations and maintenance expense.

The next priority is the Bond Fund, with its subaccounts of Interest and Principal, which is used to accumulate funds for the semi-annual interest payments and the annual principal payments on the revenue bonds. The amounts in these funds vary depending on the amount of debt service to be paid during the year. The transfers being shown into this account are for the principal and interest due July 1, 2018 and the transfers out are for debt service due July 1, 2017.

The Bond Reserve Fund is available to hold either a cash/investment deposit or a surety bond equal to the largest annual principal and interest payment. If some event reduced airport revenues and affected the RTAA's ability to pay its debt service, one year's debt service payment is available through the surety bond. This gives the RTAA one year to address whatever problem is affecting revenues.

With the refunding of the Airport Revenue Refunding Bonds, Series 2005 (the “Series 2005 Bonds”) on September 30, 2015, the RTAA no longer has any debt funded through a sale to the general public. The Series 2015 Bond is a direct loan of $20,690,000 with Compass Mortgage Corporation, an Alabama Corporation and a subsidiary of BBVA Compass.

While the terms and conditions governing the new 2015 Bond are substantially similar to terms and condition established under the Series 2005 Bonds, the RTAA is no longer required and has not deposited any cash/investment or surety bond into the Bond Reserve Fund for the Series 2015 Bond. However, the Bond Reserve Fund may be used for any parity debt issued in the future if required by any supplemental bond resolution.

79 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 5 – Financial and Budgetary Policies

With the issuance of the RTAA Subordinate Lien Airport Revenue Notes, Series 2011A and 2011B on June 1, 2011, the RTAA also has outstanding debt issued on a subordinate basis that is junior to the lien of the Series 2015 senior lien revenue bond. Funding for subordinate debt is repaid with funds accumulated after payment of the Bond Fund. The subordinate lien revenue notes were fully repaid on June 30, 2017 and the FY 2017-18 Budget does not include any appropriation to pay debt service on these notes.

The following funds have balances that are maintained beyond one fiscal year:

1. The Operation and Maintenance Reserve Fund is a deposit equal to two months of the annual operation and maintenance expense budget. The balance of this fund as of June 30, 2017 is $6,755,194. Pursuant to the bond resolution, payments will be made to this fund during the fiscal year, if necessary, to satisfy the required balance at June 30, 2018 of $7,016,690.

2. The Renewal and Replacement Fund maintains a balance set by management of $780,000 for unexpected or emergency repairs. This fund account maintains a balance to repair any damage and keep the airports running in the event some major unforeseen event, not included in the annual budget, occurs. The fund has the required balance as of June 30, 2017.

3. The Special Fund is the next priority and receives 35% of the gaming concession revenue. The RTAA has used this fund account for the Five-Year Plan Capital Improvement Program projects at the Reno-Stead Airport. The balance of this fund at June 30, 2017 is $7,414,786.

4. The General Purpose Fund is the last priority and will receive the RTAA’s share of the 50/50% revenue sharing with the airlines under the airline agreement. This fund will primarily be used for Five-Year Capital Improvement Plan projects at the Reno-Tahoe International Airport. The balance of this fund at June 30, 2017 is $29,791,676.

The expenditures from this fund are for equipment and capital projects being purchased in the FY 2017-18 Budget. Eligible projects with a project cost greater than $300,000 will be amortized over their useful lives and repaid to the RTAA prior to the calculation of funds subject to revenue sharing credit with the airlines.

80 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 5 – Financial and Budgetary Policies

SUMMARY OF APPLICATION OF REVENUES IN ORDER OF PRIORITY AS ESTABLISHED BY THE BOND RESOLUTION

Priority Revenue Fund

(1) Operation and Maintenance Fund

Bond Fund (2) Interest Account Principal Interest (3) Reserve Account

(4) Subordinate Note Fund

(5) Operation and Maintenance Reserve Fund

(6) Renewal and Replacement Fund

(7) Special Fund

(8) General Purpose Fund

The money in each fund is invested until needed. The RTAA’s investment policy, Bond Resolution, and revenue bond insurance policy specifies the type of investment options available. The majority of the eligible investments must be backed by the full faith and credit of the United States government.

The trustee bank, appointed by the RTAA to administer the revenue bond funds, serves as trustee for all RTAA investments.

Liquidity and Working Capital Policy

The credit rating agencies primarily measure an airport enterprise’s ability to meet its on-going obligations and provide a buffer against unanticipated risks using Days Cash on Hand. This ratio is calculated by identifying the sum of all unrestricted cash and investments and restricted cash and investments in the Operation and Maintenance Reserve Fund and the Renewal and Replacement Fund divided by the daily operating and maintenance expenditure budget (annual operating and maintenance budget divided by 365 days). The annual operating and maintenance budget used in the denominator excludes RTAA’s annual depreciation expense due to the non- cash nature of the reduction in the value of an asset.

81 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 5 – Financial and Budgetary Policies

Airports primarily face the following two revenue risks: (1) Volume: Traffic Base and Carrier Diversity - This risk factor is an airport’s underlying market characteristics, such as the size of the enplanement base, origin and destination passenger mix, diversity of carriers and competition from other airports or modes of transportation; and (2) the Airline Contractual Framework for Cost Recovery - This risk factor largely focuses on the underlying use and rate-setting agreements between an airport and its airline carriers. See the “Airline Agreement” information previously outlined in this section.

Commercial agreements with other users, such as terminal concessionaires, rental car companies and air cargo carriers, may also be relevant if cost recovery is structurally dependent on cash flows covered by such agreements. Airports are typically in a stronger financial position if they possess the contractual ability to recover a large majority of operating costs through airline agreements. The RTAA has cost center residual provisions in its airline agreement for the airfield and baggage handling system costs.

Based on an evaluation of these revenue risk factors and the RTAA’s cash cycle, expense volatility, and operating and capital needs, the RTAA has established its policy target to retain 365 Days of Cash on Hand. In addition, the RTAA has established a minimum ratio of no less than 300 days based on the likelihood that a decrease below this threshold may be the basis for a rating downgraded by the credit rating agencies.

The 2015 median average as compiled by Moody’s Investor Services is 550 for all airports and 579 for small hub airports.

As of June 30, 2017, the RTAA’s cash and liquidity position is solid with 483 days’ worth of unrestricted cash on hand to meet operating and maintenance requirements.

In addition, the RTAA also monitors working capital (i.e. current assets less current liabilities) with a focus on accounts receivable collections and the investment in inventory and prepaid assets reasonably expected to be realized in cash or consumed within a year. An appropriate allowance for uncollectible receivables is established and staff maintains an on-going and aggressive collection effort.

The RTAA has established an internal policy to maintain a minimum net working capital of 270 Days. This ratio is calculated by dividing current assets less current liabilities by the daily operating and maintenance expenditures (annual operating and maintenance expenses divided by 365 days). The annual operating and maintenance budget used in the denominator excludes RTAA’s annual depreciation expense due to the non-cash nature of the reduction in the value of an asset.

82 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 5 – Financial and Budgetary Policies

For the fiscal years ending June 30, 2015 and 2016, the net working capital ratio was 585 days and 672 days, respectively.

Investment Policy

The investment policy of the RTAA states that the primary objectives, in order of priority, shall be safety, liquidity, and yield. The standard of prudence to be used by investment officials shall be the "prudent person" standard and shall be applied in the context of managing an overall portfolio.

The "prudent person" standard states the following: "Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived."

Under authority delegated by the Board of Trustees of the RTAA, in accordance with chapter 474, Statutes of Nevada, NRS 354.474 and 355.175, and Bond Resolution 526, the investment of RTAA funds is the responsibility of the President/Chief Executive Officer (CEO). All cash, including bond proceeds, received by the RTAA will be invested by the Chief Financial Officer (CFO).

The CFO will maintain a list of approved broker/dealers and financial institutions which are authorized to provide investment services to the RTAA. Authorized broker/dealers will be limited to "primary" dealers or other dealers that qualify under SEC Rule 15C3-1, the Uniform Net Capital Rule. Securities purchased by the RTAA shall be delivered against payment (delivery vs. payment) and held in a custodial safekeeping account with the trust department of a third party bank insured by the Federal Deposit Insurance Corporation designated by the CFO for this purpose in accordance with NRS 355.172.

The CFO, in accordance with the provisions of Nevada Revised Statutes (NRS) 355.170, 355.180, the current bond resolutions, and this investment policy, is authorized to invest in the following: United States Treasury Bills, Notes, Bonds, and Debentures of the United States; United States Government Agency Securities Negotiable & Nonnegotiable Certificates of Deposit; Bankers' Acceptances, Commercial Paper, Money Market Mutual Funds, and the Local Government Investment Pool (“LGIP”) as established by the Nevada State Treasurer under NRS 355.167.

In addition, RTAA expanded its investment options in 2014 by modifying its investment policy to permit investment in the Washoe County Pooled Investment Fund, as permitted under NRS 355.168 and 355.175, which authorizes the Washoe County, Nevada Treasurer (“Treasurer”) to

83 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 5 – Financial and Budgetary Policies

invest by pooling any money held by the Treasurer for local governments, including that of the RTAA.

The investment policy shall be reviewed every year by the President/CEO and changes will be presented to the Finance and Business Development Committee of the Board of Trustees.

Debt Management

The debt policies of the RTAA are reviewed in Section 9 – Debt. This policy is narrowly defined since the RTAA has primarily used revenue bond debt to finance airport capital projects. The debt limit is established by guidelines outlined in the revenue bond resolutions. The RTAA’s bond resolutions establish various bond funds. The flow of revenues and expenses through these funds, and the maintenance of the balances in the funds, can affect the rate setting process and budget. The bond funds are described in the Bond Resolution - Trust Funds section within Section 5 – Financial and Budgetary Policies.

When the RTAA finances capital projects by issuing long term debt, it will pay back the bonds within a period not to exceed the estimated useful life of the project. The RTAA will not use long term debt for current operations. The RTAA will maintain good communications with its bond rating agency regarding its financial condition and will follow a policy of full disclosure in every financial report and offering prospectus.

As of October, 2015, the RTAA refinanced its senior lien bonds and currently doesn’t have any public debt. However, the RTAA will continue to maintain its financial position per the established criteria outlined by the major rating agencies in order to obtain a minimum investment grade rating of “A” with a stable outlook as such time the RTAA may decide to issue any future public debt.

RTAA is continually evaluating whether the refinance of its outstanding debt to take advantage of lower interest rates is economically feasible. At least a three percent (3%) net present value debt service savings is necessary to justify such re-financings. The RTAA’s revenue bonds and associated debt service are discussed further in Section 9 - Debt.

With the issuance of the 2015 Bond, a procedure for on-going compliance with Section 141 and 148 of the Internal Revenue Code regarding tax exempt bonds was executed by the RTAA. Specifically, the certificate requires compliance with the tax certificate and Form 8038-G by the Chief Financial Officer (CFO) or another employee of the RTAA designated by the CFO as the Compliance Officer. In addition, the Compliance Officer will conduct annual compliance checks of the current status of the proceeds of each issue of tax-exempt bonds and the current use of the facilities financed by tax-exempt bonds, notes or debentures.

84 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 5 – Financial and Budgetary Policies

To the extent the RTAA has any outstanding bonds, notes or debentures that are not rebate exempt, the RTAA will retain rebate consultants to assist in monitoring the compliance of its bond issues with the rebate and yield restriction requirements of Section 148 of the Internal Revenue Code.

Budget Process

The RTAA’s definition of a balanced budget is one in which revenues and other resources equal or exceed expenditures and other uses. A balanced budget is an integral part of maintaining the RTAA’s financial position and bond rating. Strategies employed to attain this balance include cost reductions, personnel and service efficiencies, developing and diversifying non-airline revenues and increasing fees to match program expenditures.

The RTAA operating budget is a major factor in the level of airline landing fee and terminal rental rates. Non-airline revenues also affect airline rates through the revenue sharing process contained in the airline agreement. Increasing non-airline revenues, such as new concession fees and the rents from the development of land and facilities, remains a budget goal for the RTAA staff.

Another component of airline rates is the debt service included in the airline landing fee and terminal rental rates. Debt service determines when the RTAA’s budget is “balanced.”

Operating Revenues less Operating Expenses or Net Revenues Available for Debt Service, as mentioned earlier, must equal or exceed 125% of annual revenue bond debt service. Currently, no RTAA debt service is allocated to the airfield or terminal building cost centers.

The President/CEO instructed the management staff to prepare departmental work plans to implement the Board of Trustees’ strategic plan and guiding principles as outlined in Section 3 – Strategic Initiatives. Specific department work plans in support of the strategic plan are outlined in Section 7 – Expenditures.

Under the leadership of the President/CEO, staff strives to limit the increases in operating and maintenance expenses by focusing on “mission critical” areas and exploring every opportunity to reduce or maintain the current level of operating costs. The FY 2017-18 Operating Budget of $42.100 million reflects an increase of $1.809 million or 4.5%. Approximately 86% of the budget increase is due to higher personnel related costs.

Each proposed new employee, property, plant and equipment (PP&E), and capital projects requires individual department justifications that are reviewed by RTAA Finance staff. The requests are forwarded to Human Resources, Purchasing, and Engineering, respectively, for pricing. Meetings are then held with each department to review each department’s submissions

85 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 5 – Financial and Budgetary Policies

with the President/CEO and Executive Vice President/COO. The strategic plan and associated work plans are the basis for the budget requests.

The Finance Department then incorporates the budget requests into the rate setting formula to determine the landing fee, terminal rental rate, and baggage handling system fee. The Finance Department, in conjunction with other key stakeholders, also prepares the revenue budget. Budget workshops are held during public Board of Trustees meetings to review the proposed budget and receive direction from the Board.

As required by the airline agreement, the staff also meets with the airlines to review the budget’s proposed airline rates, fees and charges along with any capital improvement projects subject to the Majority-In-Interest (MII) requirements outlined in the Airline Agreement. If the proposed capital project costs exceed limits established in the airline agreement, the airlines must submit their ballots denying any of the proposed capital projects within 30 days of this meeting.

No projects in the FY 2017-18 Budget are subject to the MII requirements outlined in the Airline Agreement discussion in this section.

The following schedules are included at the end of this section:

 A revenue sharing schedule showing the allocation of revenues, operating expenditures and debt service by cost center resulting in net revenues that will be shared with the signatory airlines.

 Summary of Sources and Uses of Funds

 Projected Balance of Cash and Investment Accounts and Sub-Accounts Established by Revenue Bond Resolutions

86 Cost Centers Reno Tahoe Airport Authority Reno Revenue Sharing Airfield Terminal Baggage Sys Landside Other Stead Total Fiscal Year 2017-18 Budget

Airline Revenue (Before Revenue Sharing)$ 8,768,704 $ 9,841,400 $ - $ - $ - $ - $ 18,610,104 Non Airline Revenue 944,700 5,874,100 1,552,481 18,600,300 7,027,000 654,750 34,653,331 Total Revenue 9,713,404 15,715,500 1,552,481 18,600,300 7,027,000 654,750 53,263,435

O&M Expense 8,968,020 17,936,046 1,488,485.0 6,545,325 4,192,353 2,068,304 41,198,533 Debt Service - - - 2,247,300 - - 2,247,300 Pre Bond Loan ------O&M Reserve 64,245 128,489 10,663 50,196 33,185 14,817 301,595 Fixed Asset 304,968 364,737 - 174,900 130,264 117,007 1,091,876 Capital Project 382,400 345,000 - 76,775 1,068,600 104,000 1,976,775 Amort of Capital Items 675,202 61,838 53,333 556,865 115,767 307,392 1,770,397 Special Fund 342,195 342,195 - Total Requirement $ 10,394,835 $ 19,178,305 $ 1,552,481 $ 9,651,361 $ 5,540,169 $ 2,611,520 $ 48,928,671

Net Revenues $ (681,431) $ (3,462,805) $ - $ 8,948,939 $ 1,486,831 $ (1,956,770) $ 4,334,765 87 Airport Share 50.00% $ 2,167,382 Airline Share 50.00% $ 2,167,382 RENO - TAHOE AIRPORT AUTHORITY FY 2017-18 A N N U A L B U D G E T Summary of Sources and Uses of Funds Actual Budget Budget 2015-16 2016-17 2017-18 SOURCES OF FUNDS Revenue Fund Landing and Aircraft Fees$ 8,071,097 $ 8,430,481 $ 9,537,704 Gaming Concession Fees 1,071,402 904,900 977,700 Food and Beverage Revenue 992,984 996,100 1,149,300 Merchandise Revenue 978,926 1,034,200 1,111,000 Auto Rental Concession Fees 6,570,902 6,587,100 7,190,800 Other Concession Fees 1,247,151 1,268,700 1,223,900 Auto Parking and Ground Transportation 10,519,785 10,113,000 11,330,900 Terminal Rents 6,511,115 8,220,700 7,561,500 Other Rents 7,087,994 7,343,800 7,650,650 Reimbursed Services & Miscellaneous 2,462,562 2,708,008 2,629,281 CFC Revenue 1,385,061 1,371,100 1,493,900 Other Non-Operating Pledged Revenue 494,307 272,100 2,270,800 Total Revenue Fund$ 47,393,287 $ 49,250,189 $ 54,127,435 Non Rate Base Revenue Non-Rate Base Interest 49,391 61,000 61,100 Fuel Tax Revenue 268,287 258,800 276,400 Fuel Tax Interest 312 900 1,600 PFC Interest 50,968 53,800 82,400 PFC Revenue 6,689,197 6,721,500 7,269,000 Other Revenue 278,163 - - Total Non Rate Base Revenue 7,336,318 7,096,000 7,690,500 TOTAL SOURCES OF FUNDS $ 54,729,604 $ 56,346,189 $ 61,817,935 USES OF FUNDS Operation and Maintenance Fund Personnel Services$ 25,995,003 $ 27,282,682 $ 28,843,415 Utilities 2,540,504 2,942,950 2,740,110 Purchased Services 4,353,927 4,808,185 5,140,997 Materials and Supplies 1,825,774 1,848,975 1,949,869 Administrative Expenses 2,189,264 2,714,479 2,611,642 Total Operation and Maintenance Fund$ 36,904,472 $ 39,597,271 $ 41,286,033 Bond Fund Interest Account 686,535 534,463 487,300 Principal Account 1,623,750 1,715,000 1,760,000 Total Bond Fund$ 2,310,285 $ 2,249,463 $ 2,247,300

Subordinate Debt Fund Interest Account 160,055 81,631 - Principal Account 2,980,000 3,057,000 - PFCs Applied (1,813,919) (1,812,216) - Total Subordinate Debt Fund$ 1,326,136 $ 1,326,415 $ - Operation and Maintenance Reserve Fund To maintain reserve level at 2 months of the annual budget of operation and maintenance expenses of the airport system$ 95,769 $ 191,030 $ 301,595 Short Term Financing Prebond Loan$ 226,867 $ - $ - Property, Plant & Equipment $ 612,753 $ 534,857 $ 1,091,876 Capital Projects Current Year 731,564 1,430,716 1,976,775 Prior year project reimbursement 1,294,853 1,659,961 1,770,397 Total Capital Projects$ 2,026,417 $ 3,090,677 $ 3,747,172 Special Fund 35 % of projected gaming revenue to Special Fund$ 374,991 $ 316,715 $ 342,195 General Purpose Fund Current Year Profit Sharing Total 4,694,148 1,945,292 4,334,765 Current Year Profit Sharing Airline Share (2,347,074) (972,631) (2,167,400) Prior Year Profit Sharing Airline Share - - - Air Service Incentive (322,009) (400,000) (400,000) Total General Purpose Fund$ 2,025,065 $ 572,661 $ 1,767,365 Non-Rate Base Interest 49,391 54,100 53,500 Non Rate Base Expenditures Fuel Tax 268,599 259,700 278,000 CFC Funding 1,385,061 1,371,100 1,493,900 PFC Funding 6,740,165 6,775,300 7,351,400 Other Revenue 383,634 6,900 1,857,600 $ 8,826,850 $ 8,467,100 $ 11,034,400 TOTAL USES OF FUNDS $ 54,729,605 $ 56,346,189 $ 61,817,935

88 RENO-TAHOE AIRPORT AUTHORITY PROJECTED BALANCE OF CASH AND INVESTMENT ACCOUNTS AND SUB-ACCOUNTS ESTABLISHED BY REVENUE BOND RESOLUTIONS FOR THE YEAR ENDED JUNE 30, 2018

Issuer Cash and Investment Accounts Bond Fund Subordinate Note Trustee's Cash and Investment Accounts Operation & Interest Principal Interest Principal Operations & Renewal & General Special Maintenance Fund Fund Fund Fund Maintenance Replacement Purpose PFC Revenue Fund (a) Fund 2015 (b) 2015 (b) Reserve Fund Fund Fund Fund (c) Fund Totals

Balance June 30, 2017 (Unaudited) $ 6,802,808 -$ 267,231$ $ 1,715,000 $ 41,435 $ 3,057,000 $ 6,715,095 $ 780,000 $ 25,212,855 $ 8,347,487 $ 4,500,000 $ 57,438,912

Receipts: Gross pledged revenues received: - Deposits from Airport revenues 53,983,035 53,983,035 Income received from investments pledged portion 82,400 420,800 503,200 PFC revenue 7,269,000 7,269,000 FAA Grants and Other Contributions 19,888,264 19,888,264

Transfer among funds: Gaming revenue 342,195 (342,195) - Operation and maintenance expenses 43,132,433 (43,132,433) - 89 Debt service requirements 487,300 1,760,000 - - - (2,247,300) - Maintain reserve requirement 301,595 (301,595) - Capital Improvement Projects (1,851,070) (3,727,396) (4,669,495) 12,940,237 2,692,276 Property, Plant and Equipment - 1,091,876 (1,091,876) - Net Cashflow from Operations 7,384,553 (7,384,553) -

Disbursements: Operation and maintenance expenses (43,132,433) (43,132,433) Property, Plant and Equipment (1,091,876) (1,091,876) Payment of revenue bond interest and principal (510,881) (1,715,000) (41,435) (3,057,000) (5,324,317) Capital Improvement Projects (32,732,384) (32,732,384)

Projected Balance at June 30, 2018 $ 5,293,933 -$ 243,650$ $ 1,760,000 $ - $ - $ 7,016,690 $ 780,000 $ 28,870,012 $ 11,029,393 $ 4,500,000 $ 59,493,678

$ (1,508,875) -$ (23,581)$ 45,000$ (41,435)$ $ (3,057,000) $ 301,595 $ - $ 3,657,157 $ 2,681,905 -$ $ 2,054,766

Fund Balance Changes (a) Capital Projects funded by the Special Fund in FY 2017-18 include improvements to the access road servicing the Nevada Army Guard, Stead runway 8/26 rehabilitation, terminal access road rehabilitation and various improvments to RTAA owned hangars and buildings. (b) The 2005 Bonds were refunded and replaced by the 2015 Bonds on September 30, 2015. (c) Capital Projects to be funded by Passenger Facility Charges in FY 2017-18 include snow removal equipment, an ARFF Vehicle, communication center systems replacement, radio and paging systems, terminal / replacement, runway 16R/34L rehabilitation, master plan update and airfield lighting vault. Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 5 – Financial and Budgetary Policies

Days Cash on Hand

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   Section 6 – Revenues Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 6 – Revenues

The Total Operating Revenue budget for FY 2017-18 is $50,362,735. This is a 5.8% increase from the FY 2016-17 Budget. Budgeted airline revenues are $16,130,204 or approximately 32% of total operating revenues. The total non-airline operating revenue budget is $34,232,531 or approximately 68% of the total operating revenue budget. A pie chart later in this section shows the relative size of airport operating revenues by the various categories.

RTAA’s revenues are fairly predictable since they are based on long term agreements with airline and non-airline tenants. Terms such as “rate base” and “non-rate base” mentioned in this document refer to the application and adherence to the agreement with the airlines. RTAA receives no local property or sales tax revenue and is not affected by the variations or limitations these revenue sources have on local governments.

The RTAA budget, within limits, is balanced each year through the airline rate setting and the revenue sharing mechanism of the airline agreement. The diversification of revenues, mentioned in this section, provides the revenue available for sharing that has allowed RTAA’s airline rates and charges to be very competitive with other airports.

For FY 2017-18, the RTAA is forecasting a 2.0% increase in enplanements to 1.948 million as compared to FY 2016-17 actual results and an 8.1% increase as compared to the FY 2016-17 Budget of 1.801 million enplaned passengers. As outlined in Section 1 – Introduction and Section 2 – Executive Summary, the increase in passenger traffic as compared to the FY 2016-17 actual results is primarily due to increased flights from Alaska, Allegiant, Delta, JetBlue, Southwest and United.

The forecasted landed weight for FY 2017-18 is projected to increase to 2,932,677 (thousand pound units), an increase of 4.4% over the actual results for FY 2016-17 and 176,304 (thousand pound units) above the adopted FY 2016-17 Budget or a 6.4% increase. An increase in airline landed weight impacts the landing fee calculation by increasing the base used to recover airfield costs.

The FY 2017-18 Budget revenue projections are, in many cases, derived by reviewing historical and forecasted trends in revenue earned and transaction levels derived from estimated passenger traffic. This approach is primarily used to forecast terminal concessions, rental car concessions, and public parking revenue.

In addition, existing fixed lease payments and minimum annual guarantees are considered in estimating fiscal year revenue budgets by revenue source. If any construction projects or other external factors that might affect tenant revenues take place or are scheduled, these events are also factored into the estimates.

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Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 6 – Revenues

Non-airline operating revenues are forecasted to be $34,232,531 in the FY 2017-18 Budget. This represents an expected increase of $2,336,523 or approximately 7.3% above the FY 2016- 17 Budget.

This increase is primarily due to the projected increase in forecasted passenger traffic and higher revenue per transaction resulting from improving economic conditions. Both of these factors impact concession and public parking revenues. The RTAA has also been successful in leasing previously vacant hangars and buildings.

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Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Operating Revenues

FY 2017-18 Operating Revenues

BHS Miscellaneous 3% 2% Aircraft Fees 19%

Parking Fees 23% Concession Fees 9%

Auto Rental 14%

Space Rentals 30%

REVENUES

Aircraft Fees$ 9,537,704 Concession Fees 4,461,900 Auto Rental 7,190,800 Space Rentals 15,212,150 Parking Fees 11,330,900 BHS 1,552,481 Miscellaneous 1,076,800

Total$ 50,362,735

93 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 6 – Revenues

There are seven major sources of revenue received by the RTAA: (1) landing and aircraft fees, (2) concession revenue, (3) auto parking and ground transportation revenue, (4) space rentals (building, hangar and land rents), (5) reimbursed services, (6) non-operating revenues, and (7) non-rate base revenues.

Overall, the RTAA is projecting operating revenues of $50.363 million in FY 2017-18, a 5.8% increase from the FY 2016-17 Budget and a 4.3% increase from the FY 2016-17 updated forecast. Key inputs used in the revenue budget include the projected changes in passenger and aircraft traffic, and regional and national economic indicators. For example, many RTAA ground and building leases have rent adjustments based on changes in the Consumer Price Index (CPI).

The charts presented in this section depict actual revenues for the fiscal years 2012-13 through 2015-16 followed by budgeted revenues for fiscal years 2016-17 and 2017-18.

LANDING AND AIRCRAFT FEES

The RTAA currently recovers almost 100% of its airfield costs through the landing and aircraft fees. Total landing and aircraft fees of $9.538 million in the FY 2017-18 Budget are anticipated to increase 13.1% as compared to the FY 2016-17 Budget due primarily to an increase in O&M costs in FY 2017-18 allocated to the Airfield Cost Center as well as increases in Fixed Assets and Capital Projects.

The airline agreement reflects an airfield residual approach to the landing fee calculation based on the airfield cost center expenditures. See Section 5 – Financial Plan tab for a more detailed description of the Airline Agreement.

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Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 6 – Revenues

Landing fees are charged to passenger and cargo carriers for each aircraft landing based on the aircraft’s Maximum Gross Landed Weight. The Landing Fee Rate is calculated by dividing (i) the total cost of the Airfield as a whole (Operation and Maintenance Expenses, Debt Service Requirements, amortization charges and other funding requirements of Bond Ordinance) less the Airfield non-airline revenues by (ii) the total landed weight of aircraft arrivals.

The FY 2017-18 landing fee rate is projected to be $2.99. This is an increase of $0.20 or 7.2% above the FY 2016-17 Budget landing fee rate and an increase of $0.23 or 8.3% above the FY 2016-17 updated forecast.

In the current airline agreement, there is no premium charged for landing fees assessed to non- signatory airlines as compared to signatory airlines. Therefore, the $2.99 rate will be charged to all airlines, signatory or non-signatory.

CALCULATION OF FY 2017-18 LANDING FEE RATE

FY 2016-17 FY 2015-16 FY 2017-18 Variance Actual Budget Forecast Budget

O&M Expenses$ 7,837,741 $ 8,472,037 $ 8,429,933 $ 8,968,020 $ 495,983 Debt Service - - - - - Coverage - - - - - Pre Bond Loan 67,726 - - - - O&M Reserve 19,930 40,169 40,169 64,245 24,076 Fixed Assets 157,478 110,297 155,426 304,968 194,671 Capital Projects 133,364 73,428 133,933 382,400 308,972 Amortization of Capital Items - - - - - Less: Revenue Sharing (Prior Year) - - - - -

Total Requirement$ 8,216,238 $ 8,695,931 $ 8,759,461 $ 9,719,633 $ 1,023,702

Less: Other Airfield Credits - - - - Other Airfield Revenues (987,025) (1,018,600) (1,021,600) (944,700) 73,900

Total Net Requirement A$ 7,229,213 $ 7,677,331 $ 7,737,861 $ 8,774,933 $ 1,097,602

Total Landed Weight (000s) B 2,599,963 2,756,373 2,805,016 2,932,677 176,304

Signatory Landing Fee Rate A/B = C$ 2.78 $ 2.79 $ 2.76 $ 2.99 $ 0.20

Signatory Landed Weight (000s) D 2,474,353 2,633,711 2,616,708 2,739,648 105,937

Signatory Landing Fee Revenue C * D$ 6,878,701 $ 7,348,053 $ 7,222,115 $ 8,191,546 $ 843,493

Non-Signatory Premium 1.00 1.00 1.00 1.00 -

Non-Signatory Landing Fee Rate$ 2.78 $ 2.79 $ 2.76 $ 2.99 $ 0.20

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Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 6 – Revenues

Signatory landing fee revenues of $8.191 million in the FY 2017-18 Budget represent an increase of approximately $843,500 or 11.5% as compared to the prior year budget. The following are factors impacting the requirements in the Airfield Cost Center and the calculation of the landing fee in the FY 2017-18 Budget:

 For FY 2017-18, the RTAA is forecasting landed weight of 2,932,677 thousand pounds, an increase of 6.4% from the FY 2016-17 approved budget and 4.6% over the current updated forecast. The increase is primarily due to increased passenger flights from Alaska, Allegiant, JetBlue, Southwest and United.

 The operation and maintenance costs allocated to the Airfield Cost Center are projected to increase 5.9% over the prior year budget. This increase is due primarily to the overall increase of the direct and indirect operating budget assigned to the airfield.

The increase in direct costs reflects higher salaries and benefits for existing employees and additional staffing in Airport Operations to address growing responsibilities. In addition, the RTAA will be updating the RNO Wildlife Assessment study last completed in 2007. Also Airport Fire is requesting an increase in supplies available to respond to medical and/or emergency situations.

Indirect or administrative cost allocations are assigned under the airline agreement based on actual or budgeted costs identified to the six direct cost centers (Airfield, Terminal, BHS, Ground Transportation, Other and Reno Stead Airport). The allocation of indirect and administrative costs to the Airfield Cost Center, as established in the Airline Use and Lease Agreement, are virtually unchanged at 22.32% as compared to the FY 2016-17 Budget of 22.03%.

 Fixed assets and capital projects cost recovery of $687,400 represents an increase of a combined $503,600 from the FY 2016-17 Budget and $398,000 from the current year updated forecast. This increase reflects a proposed investment in a regenerative air sweeper and two vehicles for Airfield Maintenance and access road reconstruction at Gate 170.

To illustrate the impact on landing fees, a 737-700 flown by Southwest Airlines, with a landed weight of 128,000 lbs., will cost $383 per landing.

Due to the administrative challenge of identifying and charging a landing fee to private aircraft (general aviation) using the airports, airfield revenues are collected from general aviation (GA) aircraft in the form of fuel flowage fees. The fuel flowage fee is collected by the Fixed Based Operator (FBO) on a per-gallon of fuel purchased by GA aircraft basis at the Reno-Tahoe International Airport (RNO) and the Reno-Stead Airport (RTS).

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This fee is established annually by ordinance and for FY 2017-18 the fee is unchanged at $0.07 per gallon at RNO and $0.05 per gallon at RTS. This ensures that general aviation aircraft pay a share of the expenses of maintaining and developing the airfield. The revenue budget for RNO fuel flowage fees is $199,900, an increase of 6.0% as compared to the FY 2016-17 Budget.

Fuel farm system revenue of $626,000 is paid by a consortium of signatory airlines for use of RTAA owned fueling facilities, equipment, and associated land. Revenue was established based on a determination of fair market value as established by independent appraisals in July 2011. At five year intervals starting on July 1, 2016, the revenue will either be adjusted based on cumulative percentage of change in the Consumer Price Index for All Urban Consumers (CPI-U) or an updated fair market appraisal of the system. The revenue included in the FY 2017-18 Budget reflects an estimated increase of 1.3% as compared to the prior year budget.

The Landing Fees and Fuel Flowage Fees of $24,300 for RTS reflect landing fees assessed for use of airfield facilities by based firefighting aircraft and fuel flowage fees from fuel sales to general aviation aircraft.

SPACE RENTALS

Space Rentals for FY 2017-18 are budgeted to reach $15.212 million, a decrease of $352,350 or 2.3% as compared to the prior year adopted budget. The revenue category is comprised of airline terminal rents, gate use charges, other non-airline terminal rents, and building, hangar, and land rents at both RNO and RTS Airports.

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Airline terminal rentals reflects cost recovery of terminal costs allocated to airline occupied facilities (commercial compensatory basis) with total facility costs divided by rentable terminal square footage. The airlines “pay only for what they use” basis and the RTAA is at financial risk if vacant facilities exist. Approximately 49.7% or $7.562 million of total Space Rents are derived from the airlines.

The Terminal Rental Rate is calculated by dividing (i) the total cost of the Terminal as a whole (Operation and Maintenance Expenses, Debt Service Requirements attributable to the Terminal, amortization charges and other funding requirements of Bond Ordinance) less airline reimbursement for disposal fees and less the Revenue Sharing Credit by (ii) rentable terminal square footage. Rentable Terminal Space is the total area of the terminal building available for lease and dedicated to the sole use of the airlines, rental car companies, concessions, aviation service providers, various government agencies, and the RTAA for purposes of generating revenue and supporting operations.

The Revenue Sharing Credit, as shown in the Calculation of Terminal Rental Rate table, is calculated as 50% of the Gross Revenues less Operation and Maintenance Expenses, Debt Service Requirements, Bond Ordinance Reserve Requirements, and Repayment of Loans to the Capital Account. The Revenue Sharing Credit is applied to reduce Signatory Airlines terminal rental rate in the current Fiscal Year, and the remaining 50% of the Airport System net revenues are transferred to the RTAA’s General Purpose Fund.

For the FY 2017-18 Budget, the average budgeted rental rate is $54.95 per square foot per annum, a decrease of 11.01% from the FY 2016-17 average budgeted rental rate of $61.74.

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CALCULATION OF FY 2017-18 TERMINAL RENTAL RATE

FY 2016-17 FY 2015-16 FY 2017-18 Variance GROSS TERMINAL RENTAL RATE Actual Budget Forecast Budget

O&M Expenses$ 16,383,966 $ 17,499,210 $ 17,102,466 $ 17,936,046 $ 436,836 Debt Service - - - - - Coverage - - - - - Pre Bond Loan 79,482 - - - - O&M Reserve 41,412 82,969 82,969 128,489 45,520 Fixed Assets 214,511 242,749 351,264 364,737 121,987 Capital Projects 230,373 195,525 195,525 345,000 149,475 Amortization of Capital Items - - - - -

Total Requirement$ 16,949,743 $ 18,020,453 $ 17,732,224 $ 18,774,272 $ 753,819

Less: Other Terminal Revenues - - - - - Less: Airline Reimbursements (Disposal Fee) (273,622) (293,100) (276,400) (274,700) 18,400

Total Net Requirement$ 16,676,122 $ 17,727,353 $ 17,455,824 $ 18,499,572 $ 772,219

Square Footage 254,236 254,236 254,308 254,360 124

Average Terminal Rental Rate (Gross)$ 65.59 $ 69.73 $ 68.64 $ 72.73 $ 3.00

Signatory Airline Terminal Leased Space 124,377 121,748 123,421 121,872 124

Signatory Airline Share of Net Requirement 8,157,866 8,489,500 8,471,600 8,863,800 374,300

Less: Revenue Sharing (Current Year) (2,347,074) (972,600) (1,698,200) (2,167,400) (1,194,800) Revenue Sharing (Authority Contribution) - - - - -

Adjusted Signatory Airline Net Requirement 5,810,792 7,516,900 6,773,400 6,696,400 (820,500)

Signatory Airline Terminal Leased Space 124,377 121,748 123,421 121,872 124

Signatory Airline Average Rental Rate (Net)$ 46.72 $ 61.74 $ 54.88 $ 54.95 $ (6.79)

As part of this calculation, thirty-five percent (35%) of gaming revenue in each fiscal year is retained by the RTAA and not available as part of the reduction to Terminal Rental Rate.

Total airline (signatory and non-signatory) terminal space rental revenue is estimated to be $7.562 million in FY 2017-18, a decrease of $659,200 or 8.0% below the FY 2016-17 Budget.

The following are significant factors impacting the requirements in the Terminal Building Cost Center and the calculation of the terminal rental rate in the FY 2017-18 Budget:

 The operation and maintenance budget allocated to the Terminal Building is increasing 2.5% above the FY 2016-17 Budget. This increase is due primarily to the overall increase of the direct and indirect operating budget assigned to the terminal building.

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The increase in direct costs primarily reflects higher salaries and benefits for existing employees in Airport Operations, Airport Police, Airport Security and Building Maintenance.

Indirect or administrative cost allocations are assigned under the airline agreement based on actual or budgeted costs identified to the six direct cost centers (Airfield, Terminal, BHS, Ground Transportation, Other and Reno Stead Airport). The allocation of indirect and administrative costs to the Terminal Cost Center, as established in the Airline Use and Lease Agreement, are slightly lower at 44.65% as compared to the FY 2016-17 Budget of 45.51%.

 Fixed assets and capital projects of $709,700 are increasing a combined 61.9% from the FY 2016-17 Budget and 29.8% from the current year updated forecast. This increase reflects a proposed investment of two vehicles and floor scrubber for Building Maintenance, upgrades to the identity management and security training systems, security camera replacements, building system upgrades and jet bridge carpet replacement.

 The proposed airline’s portion of net revenue sharing for FY 2017-18 is $2.167 million, an increase of $1.195 million or 122.8% above the prior year budget. This increase reflects the growth in revenues due to strong passenger growth outpacing higher operating expenses.

The average rental rate for FY 2017-18 is $54.95 per square foot per year. This is a $6.79 decrease or 11.0% below the FY 2016-17 budgeted average rental rate of $61.74 and $0.07 or 0.1% above the FY 2016-17 forecasted average rental rate of $54.88.

In addition, RNO derives space rents from the airlines on a per use basis and rents both terminal and non-terminal space to tenants other than the airlines. The RTAA also collects rents at RTS from aviation related tenants at the airports. These rental rates are set based on market or appraised values. Many of these rental agreements specify annual rate increases based on the consumer price index or periodic reappraisal.

RNO Terminal Rents from non-airline tenants and Non-Terminal Rents (building, hangar, and ground rent) of $7.039 million in FY 2017-18 are estimated to increase by $384,800 or 5.8% above the FY 2016-17 Budget.

Hangar, land, and other facility rent at RTS of $612,050 is a decrease of $77,950 or 11.3% less than last year’s adopted budget. This decrease is due to increased hangar vacancy and lower unmanned aircraft system testing fees based on actual results in FY 2016-17.

In addition, a decrease of $16,400 is estimated in fees derived from testing of Unmanned Aircraft Systems (UAS) in conjunction with the new Nevada Unmanned, Autonomous, and NextGen

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Collaborative Environment (NUANCE) laboratory at the RTS Terminal Building. See Section 1 Introduction for a complete update on UAS Testing at RTS.

RTAA staff has been actively involved in marketing and developing both aviation and commercial development of the airport property at both airports during the past year. With land development activity continuing its recovery from the economic recession, RTAA has several new projects working towards completion that will be positive revenue contributors going forward.

CONCESSION REVENUE

Concession revenues of $11.653 million are predicted for FY 2017-18, an increase of $861,700 or 8.0% as compared to the prior year budget. Concession revenue consists of the following: food and beverage, merchandise, gaming, rental cars, advertising, ground handling/support service providers and fixed base operators.

This overall revenue increase is primarily the result of an increase in concession revenue for gaming, food and beverage, retail and auto rental based on forecasted passenger traffic. This increase is partially offset by lower concession revenues from the RNO fixed based operator resulting from a restructuring of the business deal.

Please see Section 1 Introduction- Air Service Market Update and Section 2 Executive Summary – Airline Activity Forecast for an expanded discussion of the history and traffic assumptions used in the FY 2017-18 Budget.

The largest contributor to concession revenues is the rental car industry. The concession agreements with these firms are responsible for $7.191 million or more than 61% of total revenue from this source. The next largest contributors are gaming, merchandise, food and beverage, and advertising. Combined, these five categories represent approximately 95% of forecasted concession revenues.

In addition, there are also smaller concessions such as luggage carts, massage chairs, charging stations, self-service kiosks, and ground service providers that contribute a percentage of their gross revenues to the RTAA. The concession agreements are usually based on the greater of a minimum annual guarantee (MAG) or percentage of gross revenues being paid to the RTAA.

The following graphs and narrative provides additional information regarding the largest contributors to concession revenue. The graphs include the past four year’s actual results and the budget for FY 2016-17 and FY 2017-18.

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Gaming Revenue is a unique source of revenue for Nevada airports. The gaming concession was awarded to International Game Technology (IGT) effective December 1, 2015 under a new five year agreement, which expires on November 30, 2020.

Under this agreement, the RTAA receives 30% of Net Win under $125,000 per month, 43% of Net Win between $125,000 and $300,000 per month, and 75% of Net Win greater than $300,000 per month. The weighted average percentage that IGT pays to the RTAA is forecasted to be 35% of gross sales with no minimum annual guarantee.

This revenue structure compares to the previous agreement, executed in 2008, under which IGT paid a concession fee of 53% of Net Win up to $350,000 and 75% for Net Win over $350,000. The reduction in the RTAA’s percentage of Net Win reflected the impact of the Great Recession and ever expanding entertainment options available to passengers due to electronic devices. .

This is reflected in RTAA revenue with passengers reducing their use of discretionary income on gaming and the lower percentage starting in FY 2016. On a positive note the decreasing trend is predicted to have reached its lowest point and increasing passenger traffic in FY 2017-18 is estimated to generate $977,700 in gaming revenue, an increase of $72,800 or 8.0% over the prior year budget and $28,500 or 3.0% increase from the FY 2016-17 updated forecast.

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Food and Beverage Revenue - Creative Host Services, Inc. (CHS) was awarded the food and beverage concessions effective October 2001. Effective June 19, 2008, Creative Host Services, Inc. changed its name to SSP America, Inc. (SSP).

The concession agreement calls for SSP to pay the RTAA a percentage of gross revenues ranging from 8% to 16.5% depending on product type or a Minimum Annual Guarantee (MAG), which is 85% of the previous year’s payments but not less than $885,800, whichever is greater.

The budgeted revenue is $1.149 million for FY 2017-18. This estimate reflects an increase of 15.4% or $153,200 above the FY 2016-17 Budget and 5.4% or $58,700 above the FY 2016-17 updated forecast. The weighted average percentage that SSP pays to the RTAA is forecasted to be 10% of gross sales.

With forecasted passenger growth in both FY 2016-17 and FY 2017-18, the percentage of gross sales is anticipated to exceed the MAG in both years.

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Merchandise Revenue is projected to be $1,111,000 for FY 2017-18. This amount is $76,800 higher than the FY 2016-17 budgeted revenue and 3.4% or $36,900 above the FY 2016-17 updated forecast.

The primary concession agreement for merchandise and news and gift services is with The Paradies Shops (Paradies). This agreement provides payment to the RTAA based on a percentage of revenues ranging from 12% to 23% depending on product type or a Minimum Annual Guarantee (MAG), which is 85% of previous year’s payments but not less than $901,000, whichever is greater.

With forecasted passenger growth in both FY 2016-17 and FY 2017-18, the percentage of gross sales is anticipated to exceed the MAG in both years. The weighted average percentage that Paradies pays to the RTAA is forecasted to be 15% of gross sales.

The four post security stores, branded as the High Mountain Market, include Brighton Collectibles, No Boundaries (an outdoor apparel store), In Motion (a high tech electronics shop), and CNBC (news and gifts). Paradies also operates Adventure News (news and gifts) and a PGA Tour shop, which is available to pre-security passengers.

In addition, a women’s apparel store operated by Forever Heather is available to post-security passengers on Concourse “B” starting in 2016. Prior to this relocation, Forever Heather operated from a pre-security location. The pre-security location is now home to a Squaw Valley Mountain merchandise and concierge store.

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Advertising Revenues – Revenues are budgeted at $665,900 for FY 2017-18. This amount is $5,100 or 0.8% modestly below the FY 2016-17 budgeted revenue and $32,400 or 4.6% below the FY 2016-17 updated forecast.

Effective February 1, 2015, the RTAA executed a new five-year Nonexclusive Advertising Program Concession License for advertising services including two (2) two-year options with Clear Channel Airports. The terms of this agreement will compensate the RTAA with the greater of 55% of all display sales and 15% of Clear Vision (digital screens on the concourses) or a minimum annual guarantee of $660,000.

The FY 2017-18 Budget is forecasting that advertising revenue will be equal to the minimum annual guarantee.

The RTAA also receives approximately $5,900 in advertising revenue associated with bins used by passengers going through security screening.

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Auto Rental Revenue – The RTAA has five (5) on-airport car rental company agreements with eight (8) brands: (1) Avis/Budget Car Rental doing business as Avis, Budget, (2) DTG Operations doing business as Dollar and Thrifty, (3) Enterprise, (4) Hertz, and (5) Vanguard Car Rental doing business as Alamo and National. All of these brands have check-in counters located within the Terminal Building.

In addition, the RTAA also has one (1) off-airport concession agreement with Payless Car Rental that provides a ticket counter in the Terminal Building; however, this company has no on-airport ready/return, quick-turn-around or service/storage facilities on RTAA property.

In 2007, Enterprise acquired Vanguard Car Rental, doing business as Alamo and National. In 2013, the Hertz Corporation acquired DTG Operations, doing business as Dollar and Thrifty and Avis/Budget acquired Payless Car Rental. Effectively, three (3) rental car companies control the nine brands at RTAA.

All of these companies, with the exception of Payless, also qualified through their 2010 bid submissions to lease the following: (1) ready/return parking, (2) a lane in the quick turnaround (“QTA”) building and associated parking; and (3) a service facility and associated vehicle storage located away from the terminal on airport property.

The ready/return parking spaces (“Ready/Return Premises”) are conveniently located in the Parking Structure, across from the Terminal; the QTA building and associated vehicle parking, which provides efficient fueling and car wash services, are located immediately north of the

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Parking structure; and the Service/ Storage Facilities are located south of the Terminal Building, as further described herein under a separate Ground Lease.

Based on minimum annual guarantee (MAG) bids, Payless continues to be a limited service operator with a check-in counter on the airport; however, all other facilities are located “off- airport” with their customers required to take a shuttle to an off-airport site for the rental and return of their vehicles.

The current auto rental agreements, which began on July 1, 2010, were extended for an additional three years through June 30, 2018. This concession represents approximately 21.0% of the Airport’s total budgeted non-airline operating revenues.

Revenues are budgeted at $7,190,800 for FY 2017-18. The budgeted amount is 9.2%, or $603,700 above the FY 2016-17 Budget.

This estimate is based on the agreement terms that establish annual revenue as the greater of 10% of gross receipts at RTAA or a Minimum Annual Guarantees (MAG). With the MAG for FY 2017-18 forecasted to be set at $5,933,400, the RTAA’s Budget projects that 10% of gross receipts will be significantly higher than the MAG.

The agreements do have an abatement clause, which waives the MAG if passenger deplanements fall below 75% of the deplanements for the corresponding month in the preceding year. The FY 2017-18 Budget does not forecast any MAG abatement.

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Parking and Ground Transportation Revenue - Total auto parking and ground transportation revenues of $11.331 million are budgeted to increase 12.0% from the prior year budget and 4.0% as compared to the updated FY 2016-17 projected revenues. Auto parking represents 33.1% of the RTAA’s total budgeted non-airline operating revenues.

The increase in revenue from last year’s budget is due primarily to increased passenger traffic. In addition, the FY 2017-18 Budget is forecasting revenue per transaction higher as compared to the prior year budget; however, revenue per transaction in FY 2017-18 is forecasted to be slightly lower from the recent updated FY 2016-17 forecast due to stability in the revenue per transaction during 2017.

Ground transportation fees are projected to be $304,300 in FY 2017-18, which is an increase of $37,100 or 13.9% from the FY 2016-17 Budget. These fees are paid by transportation operators such as , shuttle , and .

With the State of Nevada authorizing Transportation Network Companies (TNC) such as Uber and Lift to begin operations in May 2015, RTAA began discussions, implemented procedures and systems, and executed permits allowing TNC companies to operate at RNO starting in January 2016.

The fees assessed to TNC companies are the same as those paid by taxis and pay limousines on a per trip basis.

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REIMBURSED SERVICES

This category is comprised of reimbursement from the airlines, tenants, and the Transportation Security Administration (TSA) for services provided by the RTAA in support of their daily operations including maintenance of the baggage handling system, trash disposal, utilities, ID badges, law enforcement at the security checkpoint and canine teams.

Reimbursed services of $2.593 million are budgeted in FY 2017-18, which is a decrease of 2.0% from the FY 2016-17 Budget. Approximately 60% of this revenue reflects reimbursement from the airlines for the baggage handling system as outlined below.

Baggage Handling System - The Baggage Handling System (BHS) Charge reflects 100% cost recovery of the operating and maintenance agreement, utilities, supplies, and other direct costs of operating the integrated explosive detection equipment system.

Based on projected operations for FY 2017-18, this revenue, which includes BHS reimbursement from signatory airlines, non-signatory airlines, and the Transportation Security Administration (TSA), is estimated to be $1.552 million.

The signatory airline portion in FY 2017-18 represents the RTAA charging $1.29 per processed bag based on an estimate of 1.816 million signatory enplaned passengers checking in with 0.60 bags per passenger on average.

 The BHS costs of $1,404,481 are included in the FY 2017-18 Budget. This represents an approximately 3.2% decrease from the FY 2016-17 Budget primarily due to the reduction in contracted costs to handle oversized baggage being taken over by the airlines.

 In FY 2017-18, the RTAA has a capital project to refurbish the Matrix 1 carousel for approximately $160,000. With the initial systems being installed in 2009, this carousel has been in continuous use for more than six years and is in need of refurbishment. The cost of this upgrade will be recovered over three years in annual installments with the last estimated installment of $53,333 in FY 2019-20.

 The total operation and maintenance costs related to the Baggage Handling System (BHS) are reduced by an estimated $37,300 because of reimbursement by the Transportation Security Administration (TSA) for direct costs associated with their screening equipment. This reimbursement is credited against the BHS recovery assessed to the airlines.

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CALCULATION OF FY 2017-18 BAGGAGE HANDLING SYSTEM FEE

FY 2016-17 FY 2015-16 FY 2017-18 Actual Budget Forecast Budget Variance

Operating Requirement

O&M Expenses$ 1,383,883 $ 1,506,042 $ 1,522,542 $ 1,488,485 $ (17,557) Debt Service - - - - - Coverage - - - - - O&M Reserve 3,831 7,141 7,141 10,663 3,523 Fixed Assets - - - - - Capital Projects - - - - - Amortization of Capital Items 70,325 70,325 70,325 53,333 (16,992) Less: TSA Reimbursement (46,781) (59,100) (47,500) (37,300) 21,800 Less: Non-Signatory Airline BHS (82,113) (74,200) (169,300) (110,700) (36,500)

Total Baggage System Charge Revenue 1,329,144 1,450,208 1,383,208 1,404,481 (45,726)

Total Number of Bags Processed - Signatory 1,128,768 1,192,931 1,153,336 1,089,722 (103,209)

Signatory Rate per Bag Processed$ 1.18 $ 1.22 $ 1.20 $ 1.29 $ 0.07

Non-Signatory Rate per Bag Processed$ 1.41 $ 1.34 $ 1.34 $ 1.42 $ 0.08

Other Reimbursed Services

The remaining FY 2017-18 Budget of approximately $1.040 million includes payments from the Transportation Security Administration (TSA) for RTAA providing police services at the security checkpoints as well as for participation in the National Explosives Detection Canine Team Program.

This category also includes reimbursement for waste disposal services and other RTAA provided utilities. The disposal services fees are based on RTAA actual costs of providing the service and utilities are billed at the rates assessed by local utility providers.

NON-OPERATING REVENUE

Non-operating revenue of $4.043 million in the FY 2017-18 Budget is an increase of $2.140 million from the FY 2016-17 Budget.

This significant increase primarily reflects a one-time gain on the sale of two box hangars to Atlantic Aviation for $1.85 million in FY 2017-18. These hangars reverted to RTAA ownership on July 1, 2017 due to the expiration of a lease agreement originally executed in 1987.

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With the exception of this one-time asset sale, this category primarily consists of Customer Facility Charge (CFC) revenues, aviation fuel taxes and interest earnings on funds the RTAA has available for investment.

Investment Interest for FY 2017-18 is budgeted at $422,400, a 31.2% increase compared to the projected revenue for the current year and a 54.7% increase from the FY 2016-17 Budget. This increase is due to slightly higher earning balances and an increase in anticipated interest rates on investments.

The RTAA’s bond resolution, state laws, and the RTAA investment policy limit the types of investments permitted for use by the RTAA. The primary objectives, in priority order, of investment activities are safety, liquidity, and yield with most securities or deposits having federal government guarantees.

Non-Operating Revenue also includes Aviation Fuel Tax revenues estimated to be $276,400 in FY 2017-18. This revenue represents a $0.01 per gallon fee collected by the State of Nevada and remitted to RTAA through Washoe County on aviation jet fuel sold, distributed, or used in the county.

The use of Aviation Fuel Tax revenue is restricted to funding transportation projects related to airports including ground transportation improvements and promoting the use of RNO including efforts to increase the number and availability of flights.

NON-RATE BASE REVENUE

Non-rate base revenue of $7.413 million is a separate classification of non-operating revenue that does not go into the calculation of the landing fees and terminal rental rates per the airline operating agreement.

Passenger Facility Charges (PFC’s) of $7.269 million are the main source of non-rate base revenues. This PFC program is a Federal program that is overseen by the Federal Aviation Administration and these funds currently cannot be spent on operation and maintenance expenses of the airport.

PFC’s are collected by airlines on their passengers’ tickets and remitted monthly to the RTAA. These funds are spent on a list of projects reviewed by the airlines in a process prescribed by the Federal Aviation Administration. This money must be segregated from all other airport revenues. For a complete explanation of the PFC program, please see Section 8 Capital Projects.

Also included in this category is restricted investment interest earned on the restricted cash balances such as revenue bond construction funds and PFC funds. The same investment policy

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Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 6 – Revenues restrictions apply to these funds, as outlined for all RTAA investments, and hence the same rate of return is used for this calculation.

These investment earnings must be returned to the construction or PFC fund pursuant to the bond resolution and the PFC rules. They cannot be used for the operation of the airports.

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Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Summary of Budgeted Revenues FY 2015-16 FY 2016-17 FY 2017-18 Percent Actual Budget Budget Change Landing Fees - Reno-Tahoe Signatory Airlines-Scheduled Carriers$ 5,334,746 $ 5,700,605 $ 6,437,800 Signatory Airlines - Freight Carriers 1,543,955 1,647,448 1,753,746 Non Signatory Airlines - Scheduled Carriers 257,658 255,413 473,029 Charters, FBO's 37,721 - - Non Signatory Airlines - Charters 20,941 - - Non-Signatory Airlines - Air Freight Carriers 75,104 86,815 104,129 Air Service Incentive- Landing Fees (103,718) (200,000) (200,000) 7,166,407 7,490,281 8,568,704 14% Aircraft Fees - Reno-Tahoe Fuel Flowage 188,888 188,600 199,900 Aircraft Parking 92,190 99,300 100,800 Aviation Gas Tax Refunds - - - Fuel Farm Use Fee and Ground Rent- RFFC 588,369 617,800 626,000 Fuel Farm Use Fee - Jet West 18,000 18,000 18,000 887,447 923,700 944,700 2% Aircraft Fees - Reno-Stead Fuel Flowage 14,414 11,900 18,200 Landing Fees 2,829 4,600 6,100 17,244 16,500 24,300 47%

TOTAL Aircraft Fees$ 8,071,097 $ 8,430,481 $ 9,537,704 13%

Concession Revenue Gaming Revenue$ 1,071,402 $ 904,900 $ 977,700 8%

Food and Beverage Revenue 992,984 996,100 1,149,300 15%

Merchandising Revenue Newsstand and Gift Shop 978,926 1,034,200 1,111,000 978,926 1,034,200 1,111,000 7%

Other Concession Revenue FBO's and Ground Handling Fixed Base Operators - Reno-Tahoe 99,578 94,900 - Security Services 40,835 43,400 43,600 Ground Handling/Support Services 286,873 276,500 318,900 427,285 414,800 362,500 -13%

Stead Concession Revenue Fixed Base Operators - Reno-Stead 17,234 15,600 17,600 Other Concession Revenue 778 300 800 18,012 15,900 18,400 16%

Advertising Revenue 633,301 671,000 665,900 -1%

Miscellaneous Concession Revenue Other Concessions 29,431 23,800 30,800 Luggage Carts 17,122 17,200 17,300 ATM 122,000 126,000 129,000 168,553 167,000 177,100 6%

Total Other Concession Revenue 1,247,151 1,268,700 1,223,900 -4%

Total Concession Revenue Excluding Auto 3,219,061 3,299,000 3,484,200 6% Rental and Gaming

On Airport Auto Rental 6,570,902 6,587,100 7,190,800 6,570,902 6,587,100 7,190,800 9%

TOTAL Concession Fees 10,861,366 10,791,000 11,652,700 8%

113 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Summary of Budgeted Revenues FY 2015-16 FY 2016-17 FY 2017-18 Percent Actual Budget Budget Change Auto Parking and Ground Transportation Auto Parking/Traffic Control Public Parking Lot 9,899,524 9,515,700 10,658,000 Off-Airport Parking 11,237 12,100 10,000 Employee Parking 324,939 309,500 350,400 Parking Fines 7,375 8,500 8,200 10,243,075 9,845,800 11,026,600 12% Ground Transportation Taxi Loop 99,430 75,700 84,700 Transportation Network Companies 13,551 25,200 58,400 Limousines 9,344 10,000 8,300 Buses/Courtesy Shuttles 141,216 148,700 138,300 Permit Fees 13,169 7,600 14,600 276,710 267,200 304,300 14%

TOTAL Auto Parking and Ground Transportation 10,519,785 10,113,000 11,330,900 12%

Space Rentals Terminal Rents, Signatory Airlines Ticket Counter 246,209 316,800 295,300 Hold Room 1,217,517 1,613,600 1,434,700 Back Office 457,137 507,100 450,900 Bag Claim 1,087,891 1,442,400 1,281,800 Bag Service Office 127,892 169,500 150,700 Bag Makeup 1,089,644 1,444,200 1,284,000 Baggage System 733,612 972,300 864,500 Operations Space 560,368 666,000 592,100 Common Use Drives 264,228 350,200 311,400 Outside Storage 26,295 34,800 31,000 Gate Use Charge/ Non-Signatory Use Fees 918,614 903,800 1,065,100 Air Service Incentive- Terminal Rent (218,292) (200,000) (200,000) 6,511,115 8,220,700 7,561,500 -8%

Terminal Rents, Other Government Agencies 340,933 347,500 297,400 Car Rental Counters & Offices 325,619 317,000 284,000 Other Terminal Rents 203,046 266,100 250,200 869,598 930,600 831,600 -11% Reno/Tahoe Non-Terminal Rents Building Rental 1,453,669 1,502,800 1,637,400 Building Rental - Auto Rental 462,031 470,200 465,900 Hangar Rental 987,237 992,600 945,500 Land Rental 1,627,104 1,577,800 1,985,500 Land Rental - Auto Rental 1,093,013 1,179,800 1,172,700 5,623,055 5,723,200 6,207,000 8% Reno Stead Rents Building Rental 7,498 30,000 8,000 Hangar Rental 301,006 318,100 278,100 Airfield Rental 50,678 51,400 51,000 Land Rental 155,306 161,900 157,800 Unmanned Aircraft System (UAS) Testing 4,000 41,600 25,200 Sewer Use Fee 11,255 10,800 11,400 Wash Rack 130 200 100 Mini Warehouse Rent 12,650 12,700 14,500 Other Rental 52,817 63,300 65,950 595,342 690,000 612,050 -11%

TOTAL Space Rentals 13,599,109 15,564,500 15,212,150 -2%

114 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Summary of Budgeted Revenues FY 2015-16 FY 2016-17 FY 2017-18 Percent Actual Budget Budget Change Reimbursed Services Security Services 565,778 558,700 575,200 Utilities 183,922 200,400 176,700 Maintenance 6,013 6,400 6,200 Disposal Fees 89,700 92,700 98,000 Other 43,340 132,900 105,400 Rental Car CFC Admin Costs 72,898 72,200 78,600 BHS Reimbursement - Signatory Airline 1,329,144 1,450,208 1,404,481 BHS Reimbursement - Non-Signatory Airline 82,113 74,200 110,700 BHS - TSA Reimbursement 46,781 59,100 37,300 TOTAL Reimbursed Services$ 2,419,689 $ 2,646,808 $ 2,592,581 -2%

Miscellaneous Revenue Miscellaneous Revenue 41,191 61,200 36,700 Damage Claim Reimbursement 1,682 - - 42,873 61,200 36,700 -40%

TOTAL OPERATING REVENUE$ 45,513,919 $ 47,606,989 $ 50,362,735 6%

Non-Operating Revenue Investment Interest 343,721 252,300 391,800 Investment Interest, CFC 23,134 19,800 29,000 Investment Interest, Fuel Tax Fund 312 900 1,600 Gain (Loss) on Sale of Fixed Assets 105,471 - 1,850,000 Aviation Gas Tax 268,287 258,800 276,400 CFC Revenue 1,385,061 1,371,100 1,493,900 Miscellaneous 21,981 - - TOTAL Non-Operating Revenue 2,147,967 1,902,900 4,042,700 112%

TOTAL Pledged Revenue$ 47,661,886 $ 49,509,889 $ 54,405,435 10%

Non-Pledged Revenue Investment Interest, Other Restricted - 400 500 Investment Interest, Flood Grant 257 13,000 - Investment Interest, Flood Proceeds 49,133 40,700 53,000 Investment Interest, Consent Decree - - 7,600 Investment Interest, PFC 50,968 6,900 82,400 PFC Revenue 6,689,197 53,800 7,269,000 Gain (Loss) on Investments Value 278,163 6,721,500 - TOTAL Non-Pledged Revenue 7,067,718 6,836,300 7,412,500 8%

TOTAL REVENUES 54,729,604 $ 56,346,189 $ 61,817,935 10%

115 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Non-Airline Revenues

% Percent Change 2015-16 2016-17 2016-17 2017-18 FY 18 Budget to Actual Budget Forecast Budget FY 17 Budget FY 17 Forecast

Non Airline Revenue

Aircraft Fees - Reno 887,447 923,700 922,000 944,700 2.3% 2.5% Aircraft Fees - Stead 17,244 16,500 17,500 24,300 47.3% 38.9% Gaming Concession 1,071,402 904,900 949,200 977,700 8.0% 3.0% Food & Beverage 992,984 996,100 1,090,600 1,149,300 15.4% 5.4% Merchandising Revenue 978,926 1,034,200 1,074,100 1,111,000 7.4% 3.4%

116 Advertising 633,301 671,000 698,340 665,900 -0.8% -4.6% Other Concessions 613,850 597,700 628,000 558,000 -6.6% -11.1% Auto Rental 6,570,902 6,587,100 6,889,500 7,190,800 9.2% 4.4% Auto Parking 10,243,075 9,845,800 10,613,400 11,026,600 12.0% 3.9% Ground Transportation 276,710 267,200 278,100 304,300 13.9% 9.4% Other Terminal Rents 869,598 930,600 930,600 831,600 -10.6% -10.6% Reno/Tahoe Non-Terminal Rents 5,623,055 5,723,200 5,730,200 6,207,000 8.5% 8.3% Reno Stead Rents 595,342 690,000 631,550 612,050 -11.3% -3.1% Baggage Handling System 1,458,038 1,583,508 1,600,008 1,552,481 -2.0% -3.0% Reimbursed Services 961,650 1,063,300 1,024,300 1,040,100 -2.2% 1.5% Miscellaneous 42,873 61,200 40,900 36,700 -40.0% -10.3%

Total Non Airline Revenue$ 31,836,397 $ 31,896,008 $ 33,118,298 $ 34,232,531 7.3% 3.4%

Non Operating Revenue 2,147,967 1,902,900 2,031,300 4,042,700 112.4% 99.0%

TOTAL NON-AIRLINE REVENUES$ 33,984,364 $ 33,798,908 $ 35,149,598 $ 38,275,231 13.2% 8.9% 









   Section 7 – Expenditures Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

The RTAA’s budget process is a zero-based process in which each expenditure line item is evaluated on its merit each year. The underlying structure of the FY 2017-18 O&M expense budget requests are the departmental initiatives and work plans supporting the implementation of the Comprehensive Strategic Plan priorities. Each department’s initiatives, work plan and budget are presented to and reviewed by the President/CEO and Executive Vice President/COO.

The total proposed FY 2017-18 budgeted O&M expense request is $42,100,139. This is 4.5% above the FY 2016-17 Budget and 6.3% above FY 2016-17 projected expenditures.

CURR. YR. CURR. YR. BUDGET PERCENT CHANGE BUDGET PROJECTED REQUEST FY18 BUDGET TO FY17 2016-17 2016-17 2017-18 BUDGET PROJECTED

Personnel Services$ 27,282,682 $ 27,135,790 $ 28,843,415 5.7% 6.3% Utilities & Communications 2,942,950 2,660,400 2,741,145 -6.9% 3.0% Purchased Services 5,322,685 5,079,354 5,731,568 7.7% 12.8% Materials & Supplies 1,848,975 1,884,955 1,949,869 5.5% 3.4% Administrative Expenses 2,893,279 2,856,851 2,834,142 -2.0% -0.8% Total$ 40,290,571 $ 39,617,350 $ 42,100,139 4.5% 6.3%

As part of the FY 2017-18 Budget review process, 10.5 positions are “frozen” and are not funded in the requested budget. For additional information, please see Section 4 – Organizational Guide.

The following narrative lists the more significant changes:

Personnel Services

The Personnel Services budget of $28.843 million includes the salaries, wages and benefits cost for RTAA’s employees. The FY 2017-18 Budget for personnel services is approximately $1.561 million or 5.7% higher than the FY 2016-17 Budget and $1.708 million or 6.3% above the projected expenditures for current FY 2016-17.

The changes in the Personnel Services budget are summarized by category in the table below.

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Percent 2016-17 Budget 2017-18 Budget Difference Change

Salaries and Wages 17,355,630 18,269,855 914,225 5.3%

Overtime 1,005,780 1,058,460 52,680 5.2%

Employee Benefits 3,901,172 4,264,200 363,028 9.3%

Retirement Contribution 5,020,100 5,250,900 230,800 4.6%

Total$ 27,282,682 $ 28,843,415 $ 1,560,733 5.7%

Salaries and Wages

Wage increases are budgeted to conform to the existing employee collective bargaining agreements and established management and civil service guidelines. Existing employee salaries are proposed to increase approximately $381,900 or 2.2%.

The International Brotherhood of Teamsters (Teamsters) has a contract with the RTAA in place with a term of July 1, 2016 through June 30, 2020 and the AAPOA (Police) bargaining unit has recently executed a new agreement effective July 1, 2017 through June 30, 2021.

The RAFFA (Fire) bargaining unit agreement expired on June 30, 2017 and negotiations with the RTAA remain underway.

There are five proposed new positions in the FY 2017-18 Budget: one Buyer, one Airport Communication Supervisor, one Airport Communication Specialist, one Landside Supervisor and one Security Supervisor with a combined budget impact of approximately $463,800.

Under the management and civil service plan, employees may also be eligible for an additional 0.5% to 3.0% increase in base salary on July 1 of a fiscal year. This increase is based on fiscal performance during the preceding 36 month period in parking and concession revenue gains and increases in aircraft landed weight.

Based on the updated forecasted revenue and landed weight for FY 2016-17, the three year rolling index indicates that the gain share will meet the 2% salary increase benchmark. The proposed FY 2017-18 Budget includes an increase of $243,200 in additional base salary under this program.

In FY 2016-17, the gain share calculation resulted in a 0.5% increase to base salary. Prior to this award, the last time the gain share was awarded was in 2008 primarily due to the Great Recession and its impact on RTAA revenues.

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The RTAA also provides management and professional salaried employees an Incentive Achievement Program as defined in the Management Guidelines and Civil Service Plan. Under this program, the amounts awarded to each employee are determined by the President/ CEO, subject to defined criteria and limits on amounts. The FY 2017-18 Budget includes $240,000 for this program.

In addition, Article 24 of the collective bargaining agreement with the International Brotherhood of Teamsters provides the maximum of the salary ranges under the agreement be adjusted on July 1, 2017 and for each of the next two years based on an increase in the 12-month average of the CPI for Urban Wage Earners and Clerical Workers (CPI-W). This calculation, which is based on the latest U.S. Bureau of Labor Statistics, results in a 1.0% increase in the maximum salary range effective July 1, 2017.

As part of the annual budget, the President/CEO also has the option to make a recommendation for increases in the minimum and maximum salaries for all classification grades (Range Adjustment) not covered by collective bargaining agreements. Subject to funding availability, this recommendation is outlined to be based on market conditions and the ability to recruit and retain highly qualified employees.

Based on these criteria, the President/CEO recommending and the Board of Trustees approved an increase in the minimum and maximum salary grades for management and civil service plan employees of 1.0%.

Overtime

The FY 2017-18 Budget for overtime is $1,058,460, an increase of $52,680 or 5.2%. This increase represents increased workload for Airport Police, Fire and snow removal duties for Airfield Maintenance partially offset by savings in Airport Communications with the addition of new positions.

Employee Benefits

Employee benefits, comprised primarily of health, dental, vision and worker’s compensation but excluding retirement contributions, are projected to increase by $363,000 or 9.3% due primarily to estimated increases in health insurance rates.

The primary driver of this increase is higher health insurance costs anticipated to increase approximately $368,300 or 14.1% above the FY 2016-17 Budget. Health insurance is currently managed on a calendar year basis (January 1 – December 31). In November 2016, the RTAA competitively bid this insurance and the best offer resulted in an increase of 16.8% in Calendar Year 2017 as compared to 2016. Despite this increase, this process was successful in expanding

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the coverage period to a two year period with the potential increase in Calendar Year 2018 of no more than 9%.

The proposed FY 2017-18 Budget reflects six months (July 1, 2017 to December 31, 2017) at the rates currently in place and six months (January 1, 2018 to June 30, 2018) at rates increased by 9% as guaranteed not to exceed in 2018.

Retirement

Retirement contributions are projected to increase by $230,800 or 4.6%. Current contribution rates under the Employer-Pay Contribution Plan are 28.0% for regular employees and 40.50% for Police/Fire members. These rates are recommended by the Public Employee Retirement System (PERS) based on an actuarial valuation report adopted by the Retirement Board and formally established by the Nevada Legislature during its biennial session that occurs during odd number years.

The RTAA has been notified by PERS that there will be no changes in the contribution rate in the next two fiscal years.

Utilities and Communications

The Utilities and Communications budget includes the RTAA’s electricity, water, and natural gas. The costs of telephone and data communication services are also budgeted in this category.

The FY 2017-18 Budget of $2.741 million is 6.9% or approximately $201,800 below the FY 2016-17 Budget and an increase of 3.0% or approximately $80,700 over the projected expenditures for the current FY 2016-17.

Percent 2016-17 Budget 2017-18 Budget Difference Change

Electricity 1,871,000 1,610,300 (260,700) -13.9%

Natural Gas 357,000 397,300 40,300 11.3%

Water 157,000 158,640 1,640 1.0%

Other Utilities 557,950 574,905 16,955 3.0%

Total$ 2,942,950 $ 2,741,145 $ (201,805) -6.9%

The decrease in the FY 2016-17 Budget for utilities is primarily due to lower utility rates and efficiency savings associated with electricity.

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The Baggage Handling System (BHS) equipment including HVAC units and X-Ray equipment are separately metered and billed directly to the airlines in the BHS charge. In addition, direct utility billing is provided to the Transportation Security Administration (TSA) for its equipment and screening areas.

Purchased Services

The Purchased Services category is used for the legal and professional services necessary to meet the technical support needs of the RTAA, as well as maintenance and repair services for specialized systems and equipment. Equipment rental is also in this category of the budget.

The FY 2017-18 Budget for Purchased Services of $5.732 million is increasing 7.7% or approximately $408,900 from the FY 2016-17 Budget and 12.8% or $652,200 above the projected expenditures for the current fiscal year 2016-17.

Percent 2016-17 Budget 2017-18 Budget Difference Change

Legal Services 425,000 425,000 - 0.0%

Data Processing 714,382 749,512 35,130 4.9%

Other Professional Services 904,981 941,715 36,734 4.1%

Contracted Services 2,376,133 2,797,025 420,892 17.7%

Other Repair/Maintenance Svcs 608,736 506,347 (102,389) -16.8%

Other Purchased Services 293,453 311,969 18,516 6.3%

Total$ 5,322,685 $ 5,731,568 $ 408,883 7.7%

The variance between the FY 2017-18 Budget and the previous year’s budget is primarily due to the following areas:

 Other Professional Services – an increase of $36,700 is due primarily to the following:

 Parking Revenue Control System maintenance of $273,500 has been reclassified from Other Professional Services to Contracted Services

This decrease is significantly offset by higher proposed Professional Services as follows:

 Rental Car Ready Return Parking/Traffic Reconfiguration Study of $50,000  Strategic Plan Update of $35,000

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Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

 Air Service Studies of $50,000  Updated Customer Satisfaction Survey and Economic Impact Study of $40,700  Investment Advisory Service of $37,500  Wildlife Hazzard Assessment of $77,200  Other Professional Services of $18,300

 The increase in Contracted Services of $420,900 is due primarily to the following:

 Parking Revenue Control System maintenance of $273,500 reclassified from Other Professional Services to Contracted Services  Customs and Border Protection Officer (1/2 of Fiscal Year) of $87,500  Rental Car Service Facility maintenance of $95,400 funded from Customer Facility Charges  Restroom and Carpet Cleaning of $27,900  Airfield Rubber Removal of $21,200  Other Contracted Services of $15,400

This increase is partially offset by lower Contracted Services as follows:

 Services Contract in Technology and Information Systems (TIS) reduced by $100,000 due to department being fully staffed and work brought in-house.

 The decrease in Other Repair & Maintenance Services of $102,400 is due primarily to the following:

 Contract maintenance of the access control system of $41,300 no longer needed due to Technology and Information System department being fully staffed and work brought in- house  Repair and maintenance of general aviation hangar doors and pavement repairs at Outside Properties reduced by $58,500  Other Repair and Maintenance of $2,600

Materials and Supplies

The Materials and Supplies section is used primarily for the items needed by the Facilities and Maintenance staff to maintain the airports, as well as the office supplies used by the administrative staff.

The FY 2017-18 Budget for Materials and Supplies of $1.950 million is 5.5% or approximately $100,900 above the FY 2016-17 Budget and 3.4% or $64,900 above the current year updated forecast.

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Percent 2016-17 Budget 2017-18 Budget Difference Change

Office Supplies 127,690 133,760 6,070 4.8%

Operating Supplies 594,362 610,343 15,981 2.7%

Repair and Maintenance Supplies 807,700 815,325 7,625 0.9%

Small Tool and Minor Equipment 319,223 390,441 71,218 22.3%

Total$ 1,848,975 $ 1,949,869 $ 100,894 5.5%

The increase in Materials and Supplies is primarily due to the following:

a. Access Control and Monitoring System (ACAMS) parts of $10,000 b. Computer hard drive replacement of $20,400 c. Employee safety equipment of $18,500 d. Medical supplies of $15,100 e. LED Light Replacement of $15,000 f. Other Supplies and Materials of $15,800

Administrative Expenses

The Administrative Expenses budget is used for staff training, conference sponsorship and registration fees, travel, air service development and route maintenance, airport economic development, conference sponsorship and airport community relations. Also in this section are the RTAA’s property and liability insurance premiums and credit card processing fees.

The FY 2017-18 Budget for Administrative Expenses of $2.834 million is decreasing $59,400 or 2.1% below the current FY 2016-17 Budget and $23,000 or 0.8% below the projected expenditures for FY 2016-17.

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Percent 2016-17 Budget 2017-18 Budget Difference Change

Educational & Professional Fees 459,045 474,586 15,541 3.4%

Travel & Reimbursed Expense 271,034 308,338 37,304 13.8%

Recruitment 5,600 4,700 (900) -16.1%

Air Service Development 394,800 405,500 10,700 2.7%

Economic Development 50,000 50,000 - 0.0%

Conference Sponsorship 105,000 10,000 (95,000) -90.5%

Community Outreach 181,250 168,208 (13,042) -7.2%

Publications / Advertising 140,800 132,960 (7,840) -5.6%

Airport Insurance 1,023,300 970,700 (52,600) -5.1%

Credit Card Fees 262,450 308,870 46,420 17.7%

Fines and Settlements - - -

Total$ 2,893,279 $ 2,833,862 $ (59,417) -2.1%

Each department specifically budgets for training to attain the goal of 20 hours of training for each employee. The Human Resources budget includes an increase of $10,000 for RTAA-wide general and organizational training and tuition reimbursement.

In addition, the FY 2017-18 Budget continues to support professional employee training and development (conference registration, travel and reimbursed expenses) with one trip per department for airport industry education. In addition, travel for staff that serves as a Board or steering committee member of a trade association or as deemed essential by the President/CEO has been retained at current year levels. All trips have to be approved by either the President/CEO or the Executive Vice-President/COO.

As part of the airport certification process under 14 CFR Part 139, the RTAA is required every three years to conduct a full scale exercise to test and evaluate the operational capacity of the emergency management system. A disaster exercise was completed in April 2017 and the FY 2017-18 Budget reflects savings of $18,000.

In addition, conference sponsorship is decreasing $95,000 due to the RTAA’s one-time hosting of the 2016 Boyd Group - International Aviation Forecast Summit (“Boyd Summit”) in

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Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

September 2016. This successful event resulted in the RTAA hosting sixty-two (62) airline representatives (approximately half were executive level or higher) many of whom had never been to Reno-Tahoe, sixteen (16) media representatives, and ten (10) aircraft manufacturer representatives.

The RTAA also does extensive air service development and airport economic development marketing through its sponsorship of a chalet and inviting guests to attend the National Championship Air Races (NCAR) at RTS. With the Boyd Summit being a one-time event and held in conjunction with NCAR, the RTAA required additional sponsorship funding for a larger chalet and catering to accommodate the additional guests.

In FY 2017-18, the proposed budget does not need this level of sponsorship and the community outreach budget has been lowered by $27,000. With this change, the NCAR sponsorship is being returned to levels consistent with prior year events.

The savings from not hosting the Boyd Summit allowed the RTAA to fund an additional Customs and Border Protection Officer, increase the Community Outreach Advertising Program, fund additional air service development travel, and celebrate the 75th anniversary of RTS without an increase in the overall administrative expenses.

Airport liability insurance is estimated to decrease by $52,600 or 5.1% from the FY 2016-17 Budget and increase approximately $27,450 or 3.0% as compared to updated forecast. This estimate is based on information provided by the RTAA’s broker of record, Arthur J. Gallagher & Company.

The last item in this section reflects a proposed increase of approximately $46,400 in credit card transaction fees. This increase is the direct result of higher than projected FY 2017-18 parking and mini-warehouse revenues paid by customers and tenants using credit cards.

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Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

Operation & Maintenance Expenditures

FY 2017-18 O&M Expenditures

Personnel Services 68%

Utilities 6%

Purchased Services 14%

Materials and Supplies 5% Administrative 7%

EXPENDITURES

Personnel Services$ 28,843,415 Utilities 2,741,145 Purchased Services 5,731,568 Materials and Supplies 1,949,869 Administrative 2,834,142

Total$ 42,100,139

126 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T Summary of Budgeted Expenditures

2015-16 2016-17 2017-18 PERCENT Account Group ACTUAL BUDGET BUDGET CHANGE Personnel Services$ 25,007,616 $ 27,282,682 $ 28,843,415 5.7% Utilities and Communications 2,540,504 2,942,950 2,741,145 -6.9% Purchased Services 4,803,679 5,322,685 5,731,568 7.7% Materials and Supplies 1,821,369 1,848,975 1,949,869 5.5% Administrative Expenses 2,343,674 2,893,279 2,834,142 -2.0%

Total Operating Expenses$ 36,516,842 $ 40,290,571 $ 42,100,139 4.5%

Property, Plant and Equipment 652,347 534,857 1,091,876 104.1%

TOTAL$ 37,169,189 $ 40,825,428 $ 43,192,015 5.8%

127 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T Resources Applied by Organizational Unit

2015-16 2016-17 2017-18 CHANGE ACTUAL BUDGET BUDGET Board of Trustees Department Board of Trustees$ 122,320 $ 136,080 $ 172,330 26.6% Internal Audit 232,889 243,370 261,275 7.4% Legal Counsel 445,256 443,350 444,350 0.2% TOTAL 800,464 822,800 877,955 6.7%

President/CEO Department President/CEO 744,397 776,850 841,500 8.3% Air Service Development 427,719 670,805 565,074 -15.8% Marketing and Public Affairs 1,113,770 1,376,825 1,478,551 7.4% Economic Development 1,079,004 1,151,400 1,270,850 10.4% Outside Properties 1,049,716 1,038,375 1,183,196 13.9% TOTAL 4,414,606 5,014,255 5,339,171 6.5%

Executive Vice-President/COO Department Executive Vice-President/COO 389,421 393,795 346,730 -12.0% Technology and Information Systems 2,058,110 2,217,416 2,204,856 -0.6% Reno-Stead Airport 997,546 1,027,330 1,067,590 3.9% Unmanned Aircraft Systems 77,827 269,196 258,870 -3.8% Human Resources 852,509 986,800 1,043,656 5.8% TOTAL 4,375,413 4,894,537 4,921,702 0.6%

Finance and Administration Department Accounting and Administration 992,781 1,029,605 1,098,275 6.7% Finance and Budgeting 310,183 329,850 326,550 -1.0% Purchasing and Materials Management 499,470 521,070 658,230 26.3% TOTAL 1,802,434 1,880,525 2,083,055 10.8%

Operations and Public Safety Department Vice-President of Operations and Public Safety 317,807 352,345 362,545 2.9% Airside Operations 1,962,977 2,069,871 2,348,046 13.4% Landside Operations 1,472,662 1,528,513 1,701,873 11.3% Airport Rescue and Fire 2,496,130 2,797,796 2,974,237 6.3% Airport Police 3,004,409 3,252,981 3,446,371 5.9% Airport Security 1,318,760 1,391,925 1,545,625 0.0% TOTAL 10,572,743 11,393,431 12,378,697 8.6%

Planning and Engineering Department Planning and Environmental Services 902,667 1,066,995 1,133,730 6.3% Engineering and Construction 691,304 710,600 747,300 5.2% TOTAL 1,593,971 1,777,595 1,881,030 5.8%

Facilities and Maintenance Department Director of Facilities and Maintenance 721,064 744,167 672,130 -9.7% Airfield Maintenance 3,262,574 3,519,799 3,643,264 3.5% Building Maintenance and Services 6,900,700 7,413,595 7,499,650 1.2% Baggage Handling System 1,383,883 1,506,042 1,488,485 -1.2% TOTAL 12,268,220 13,183,603 13,303,529 0.9%

Nondepartmental Operation and Maintenance Expenses 383,316 1,039,025 962,500 -7.4% Nondepartmental Non Rate Base Expenses 305,675 284,800 352,500 23.8%

Total Operations and Maintenance Expense 36,516,842 40,290,571 42,100,139 4.5%

Property, Plant & Equipment 652,347 534,857 1,091,876 104.1%

TOTAL$ 37,169,189 $ 40,825,428 $ 43,192,015 5.8%

128 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

Departmental Operation & Maintenance Expenditures

FY 2017-18 O&M by Department

Nondepartmental Expenses Facilities and 3% Maintenance 32% Board of Trustees 2%

Chief Executive Officer 13% Planning and Engineering 4%

Chief Operating Officer 12%

Finance and Operations and Public Administration Safety 5% 29%

DEPARTMENT

Board of Trustees$ 877,955 Chief Executive Officer 5,339,171 Chief Operating Officer 4,921,702 Finance and Administration 2,083,055 Operations and Public Safety 12,378,697 Planning and Engineering 1,881,030 Facilities and Maintenance 13,303,529 Nondepartmental Expenses 1,315,000

Total $ 42,100,139

Note: Fixed Assets and Capital Projects not included

129 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Board of Trustees

Mission Statement: Establish policies that govern the operation of the RTAA through the adoption of resolutions and awarding of contracts.

General Counsel

Mission Statement: Provide legal services to the Board of Trustees and RTAA staff, including legal opinions, litigation defense, contract and legal document review, regulatory and legislative consultation, and legal representation at Board meetings and other meetings as required, and performance of other duties as required.

Key Duties and Responsibilities:

 Provide legal advice.  Advise on individual, labor and employment matters.  Review personnel, fiscal and other policies, as well as RTAA by-laws and resolutions.  Defend lawsuits, administrative claims, or other legal claims.  Conduct litigation as necessary.  Maintain knowledge of issues facing the RTAA and be prepared to offer legal opinions.  Provide legal expertise in the following areas: 1. Airport and aviation-related matters 2. Airline Use and Lease Agreements 3. Employment and Labor Law 4. Collective Bargaining and arbitration 5. Environmental Law 6. Contract Law 7. Nevada Revised Statutes – Purchasing / Public Works 8. General Tort Law 9. Water Rights Law 10. Property Development and commercial transactions 11. Airline and Tenant Bankruptcy 12. Noise abatement and/or mitigation 13. Open Records Law

 Prepare, review, consult, and approve contracts.  Advise on government grant and contract issues.  Review and approve legislative documents.  Advise on responses to subpoenas, court orders, and requests for information from third parties.

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 Attend Board of Trustee and Committee meetings, as necessary.  Attend work sessions and meetings with staff as required.  Coordinate the services of outside legal firms and review all outside counsel invoices.

Internal Audit

Mission Statement: To protect and safeguard the RTAA assets through independent, objective assurance and consulting services that evaluate the effectiveness of risk management, internal control, and governance processes.

Key Duties and Responsibilities:

 Conduct audits that focus on value-added auditing techniques.  Conduct Lease Compliance audits.  Review all Accounts Payable and Travel Expense reimbursements.  Monitor Public Parking Operations - Perform continuous monitoring of operational activities specific to the parking garage audit program.  Audit monthly the Rental Car Companies for agreement compliance.  Perform an Enterprise Risk and Fraud Risk Assessment to evaluate potential risk areas and assist in the development of the annual audit plan.  Conduct value added Performance Risk Assessment Audits of internal divisions and concessions with a focus on reducing financial, reputational, and procedural risks.  Complete audits as specified in the annual Audit Plan.  Perform special assignments, as requested.  Prepare annual Audit Plan.  Prepare proposed fiscal year budgets for the Internal Audit Department and assist with the General Counsel Budget.  Participate in committees and/or organizational development opportunities.  Participate in professional organizations that augment Internal Audit skills and professional development.

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BOARD OF TRUSTEES

Section 101

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $27,449 $30,800 $31,100 1% Trustee Stipend 41190 60,480 60,480 60,480 0% Service Awards 41270 391 0 0 0% Group Insurance 41340 5,295 5,700 6,700 18% Retirement 41360 7,635 8,600 8,700 1% Accrued PERS Expense 41365 383 0 0 0%

TOTAL PERSONNEL SERVICES 101,632 105,580 106,980 1%

PURCHASED SERVICES Consultants - General 43140 0 0 35,000 % Office Equipment Rental 43210 2,889 3,600 4,000 11% Freight Expense 43430 0 100 100 0% Other Purchased Services 43490 361 500 350 -30%

TOTAL PURCHASED SERVICES 3,251 4,200 39,450 839%

MATERIALS & SUPPLIES Office Supplies 44100 1,854 1,500 1,500 0% Paper 44110 64 300 100 -67% Postage 44120 33 100 100 0% Printing & Forms 44130 110 500 100 -80%

TOTAL MATERIALS & SUPPLIES 2,061 2,400 1,800 -25%

ADMINISTRATIVE EXPENSE Conference Registration Fees 45130 625 5,000 5,000 0% Training Expense 45140 0 500 700 40% Meeting Expense 45150 9,106 8,400 8,400 0% Travel & Reimbursed Expense 45210 4,422 10,000 10,000 0% Community Relations 45398 1,222 0 0 0%

TOTAL ADMINISTRATIVE EXPENSES 15,375 23,900 24,100 1%

TOTAL EXPENSES BEFORE FIXED ASSETS 122,320 136,080 172,330 27%

FIXED ASSET ACQUISITION Fixed Asset Acquisition 48150 0 0 19,450 %

TOTAL DEPARTMENT EXPENSES $122,320 $136,080 191,780 41%

132 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

INTERNAL AUDIT

Section 204

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $134,730 164,500 176,800 7% Vacation Pay 41130 13,263 3,100 3,100 0% Sick Leave 41140 7,467 2,600 2,000 -23% Holiday Pay 41150 7,657 0 0 0% Medicare 41320 2,376 2,400 2,600 8% Group Insurance 41340 12,688 14,200 16,200 14% Disability Insurance 41342 1,182 1,300 1,300 0% Vision Insurance 41344 217 200 200 0% Dental Insurance 41347 1,431 1,500 1,500 0% Workers Comp 41350 188 200 200 0% Retirement 41360 43,424 46,000 49,500 8% Accrued PERS Expense 41365 2,206 0 0 0%

TOTAL PERSONNEL SERVICES 226,829 236,000 253,400 7%

PURCHASED SERVICES Office Equipment Rental 43210 522 600 550 -8%

TOTAL PURCHASED SERVICES 522 600 550 -8%

MATERIALS & SUPPLIES Office Supplies 44100 246 150 250 67% Paper 44110 0 25 25 0% Postage 44120 1 25 25 0% Printing & Forms 44130 0 75 0 -100% Office Small Equipment 44410 0 50 50 0%

TOTAL MATERIALS & SUPPLIES 247 325 350 8%

ADMINISTRATIVE EXPENSE Membership Dues 45110 395 625 750 20% Books & Subscriptions 45120 559 460 460 0% Conference Registration Fees 45130 1,050 1,000 1,400 40% Training Expense 45140 65 200 100 -50% Meeting Expense 45150 0 100 50 -50% Travel & Reimbursed Expense 45210 3,222 4,060 4,215 4%

TOTAL ADMINISTRATIVE EXPENSES 5,291 6,445 6,975 8%

TOTAL SECTION EXPENSES $232,889 $243,370 261,275 7%

133 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

GENERAL COUNSEL

Section 102

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PURCHASED SERVICES Legal Contracted Service 43110 441,475 425,000 425,000 0% Other Professional Services 43190 0 15,000 15,000 0% Other Purchased Services 43490 49 250 250 0%

TOTAL PURCHASED SERVICES 441,523 440,250 440,250 0%

ADMINISTRATIVE EXPENSE Books & Subscriptions 45120 0 0 600 % Conference Registration Fees 45130 585 1,700 1,800 6% Travel & Reimbursed Expense 45210 3,147 1,400 1,700 21%

TOTAL ADMINISTRATIVE EXPENSES 3,732 3,100 4,100 32%

TOTAL SECTION EXPENSES $445,256 $443,350 $444,350 0%

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President/CEO

Mission Statement: Implement Board policy to ensure the operation and maintenance of a safe, efficient, customer service oriented, and financially self-sufficient airport system. In addition, this department is responsible for the achievement of Board adopted strategic initiatives, maintaining strong relations with the community, and representing the RTAA’s interests at the local, state, and federal government levels.

Key Duties and Responsibilities:

 Develop policies and plans for the safe and efficient operation of the Reno-Tahoe International Airport (RNO) and the Reno-Stead Airport (RTS).  Direct and manage staff in the development and implementation of work plans to achieve the Strategic Priorities and Guiding Principles /Operating Practices established by the Board of Trustees.  Oversee the RNO air service development effort and promote air carriers and their destinations to the Reno-Tahoe community.  Lead and/or work closely with the state and local economic development agencies and other community partners to attract and expand business opportunities and real estate development at both airports.  Maintain continuing and pertinent communication with the Board of Trustees.  Represent the RTAA’s plans and initiatives through speaking engagements in professional meetings.  Lead negotiations with regulators, major customers and other stakeholders.  Communicate effectively with public, government, community and aviation industry leaders.

President/CEO - Initiatives:

FY 2016-17 Current Initiatives

1. Enhance the Community Outreach Program and maintain an effective and positive working relationship with appointing governmental entities.

Strategic Initiative / Guiding Principle: Increase Air Service and the Guiding Principle of Professionalism and Ethics

Description: This initiative encourages communication and outreach to all airport stakeholders and appointing local government entities to further enhance cooperation, coordination and teamwork.

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One facet of this initiative is represented by the Community Outreach Committee (COC), a group of local business and community leaders, who provide valuable input and support to the RTAA’s air service development efforts and operations. RTAA staff and the Trustees appointed to this committee hold regular meetings to update and solicit input from the COC.

In addition, the RTAA is a quasi-municipal corporation that was created by the Nevada State Legislature and began operation on July 1, 1978. The nine-member Board of Trustees that governs the RTAA is appointed by the City of Reno (4 Trustees), City of Sparks (2 Trustees), Washoe County (2 Trustees) and the Reno Sparks Convention and Visitors Authority (1 Trustee). This initiative provides for on-going communication and coordination with the appointing entities to enhance a positive working relationship.

Performance Measure: The President/CEO will also meet annually with all four (4) appointing governmental entities by June 30, 2017.

Progress: 100% Completed. The President/CEO provided a formal presentation updating all of the appointing entities on air service and economic development as follows:

May 22, 2017 Sparks City Council May 23, 2017 Washoe County Commission June 7, 2017 Reno City Council June 22, 2017 RSCVA Board of Directors

The RTAA maintained positive relations through on-going communication and outreach efforts during FY 2016-17.

FY 2017-18 New Initiatives

1. Assist the Board of Trustees in updating and adopting a five-year Strategic Plan for the period of FY 2018-19 through FY 2022-2023.

Strategic Initiative / Guiding Principle: All apply.

Description: At the June 13, 2013 Board of Trustees meeting, the first strategic plan for the RTAA was adopted. The plan was a five-year guide, established with flexibility and forethought to the ever-changing aviation industry, to establish a vision for the future. The priorities were focused on the five strategic initiatives outlined in Section 3. The plan was created through a public process that invited participants from airport committees, user groups, the Board, staff and the public.

This plan is set to expire of June 30, 2018 and this initiative is to update and modify the plan to reflect the Board’s updated vision for the future with the focus on the long-term viability of the RTAA and its ability to maintain and attract air service to our community.

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Performance Measure: Update and obtain Board approval of the updated Strategic Plan by June 30, 2018.

2. Enhance the Community Outreach Program and maintain an effective and positive working relationship with appointing governmental entities.

Strategic Initiative / Guiding Principle: Increase Air Service and the Guiding Principle of Professionalism and Ethics

Description: This initiative encourages communication and outreach to all airport stakeholders and appointing local government entities to further enhance cooperation, coordination and teamwork.

One facet of this initiative is represented by the Community Outreach Committee (COC), a group of local business and community leaders, who provide valuable input and support to the RTAA’s air service development efforts and operations. RTAA staff and the Trustees appointed to this committee will hold regular meetings to update and solicit input from the COC.

In addition, the RTAA is a quasi-municipal corporation that was created by the Nevada State Legislature and began operation on July 1, 1978. The nine-member Board of Trustees that governs the RTAA is appointed by the City of Reno (4 Trustees), City of Sparks (2 Trustees), Washoe County (2 Trustees) and the Reno Sparks Convention and Visitors Authority (1 Trustee).

This initiative provides for on-going communication and coordination with the appointing entities to enhance a positive working relationship.

Performance Measure: The President/CEO is to meet annually with all four (4) appointing governmental entities by June 30, 2018.

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PRESIDENT/CEO

Section 201

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $308,905 $360,400 $388,500 8% Vacation Pay 41130 28,623 4,900 5,500 12% Sick Leave 41140 6,386 3,800 4,000 5% Holiday Pay 41150 17,216 0 0 0% Overtime Pay 41210 0 1,800 0 -100% Automobile Allowance 41250 6,923 7,200 7,200 0% Incentive Awards 41260 1,804 0 0 0% Medicare 41320 5,231 5,200 5,200 0% Group Insurance 41340 11,165 12,200 13,800 13% Disability Insurance 41342 3,102 3,400 3,600 6% Vision Insurance 41344 217 200 200 0% Dental Insurance 41347 1,520 1,000 1,000 0% Workers Comp 41350 282 400 400 0% Retirement 41360 82,488 87,500 93,700 7% Accrued PERS Expense 41365 4,138 0 0 0%

TOTAL PERSONNEL SERVICES 478,001 488,000 523,100 7%

PURCHASED SERVICES Other Professional Services 43190 159,172 170,000 170,000 0% Office Equipment Rental 43210 1,860 1,600 1,500 -6% Freight Expense 43430 42 200 200 0% Other Purchased Services 43490 537 0 0 0%

TOTAL PURCHASED SERVICES 161,612 171,800 171,700 0%

MATERIALS & SUPPLIES Office Supplies 44100 1,664 2,200 2,200 0% Paper 44110 34 300 200 -33% Postage 44120 16 100 100 0% Printing & Forms 44130 123 300 300 0%

TOTAL MATERIALS & SUPPLIES 1,838 2,900 2,800 -3%

ADMINISTRATION EXPENSES Educational & Professional Fees 45100 0 400 400 0% Membership Dues 45110 85,552 87,000 112,000 29% Books & Subscriptions 45120 75 1,000 500 -50% Conference Registration Fees 45130 2,915 3,500 3,500 0% Meeting Expense 45150 3,213 8,000 8,000 0% Travel & Reimbursed Expense 45210 8,963 12,000 17,000 42% Community Relations 45370 2,218 1,750 2,000 14% Community Outreach 45398 10 500 500 0%

TOTAL ADMINISTRATIVE EXPENSES 102,947 114,150 143,900 26%

TOTAL DEPARTMENT EXPENSES $744,397 $776,850 $841,500 8%

138 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Air Service Development

Mission Statement: Maintain and/or increase the level of passenger and cargo air service at the Reno-Tahoe International Airport (RNO) by collaborating with community stakeholders to define critical markets and developing route analysis, business plans and marketing packages to aggressively promote RNO opportunities to key airline decision makers.

Key Duties and Responsibilities:

 Communicate current airport status and promote air carriers and their destinations to the Reno-Tahoe community.  Develop and present route analyses and business plans to airlines designed to maintain existing air service, as well as attract new air service opportunities.  Develop air service marketing and advertising programs to promote local market demand and incorporate the business community in the messaging.  Develop and present air cargo business plans to domestic and international cargo carriers.  Present comprehensive business cases to air cargo carriers, forwarders, and other end users.  Partner with community organizations that contribute to the air service and business development of RNO such as the Regional Air Service Corporation (RASC), Economic Development Authority of Western Nevada (EDAWN), Northern Nevada Development Authority (NNDA), Reno Sparks Convention and Visitors Authority (RSCVA), Nevada Commission of Tourism (NCOT) a n d Governor’s Office of Economic Development (GOED).  Support business and professional organizations that are related to the travel industry such as the American Association of Airport Executives (AAAE), Airports Council International- North America (ACI-NA) and The International Air Cargo Association (TIACA).  Participate in professional training to increase knowledge of air passenger, air cargo and travel industry. This training may include seminars hosted by AAAE, ACI JumpStart, ACI Data Planning Seminar, ACI Air Cargo and the National Transportation Safety Board (NTSB).  Seek ad hoc opportunities to increase air passenger and/or cargo service i.e. charters, extra sections, larger aircraft.  Identify and market RNO to international charters.  Build on relationships with RNO airline station managers and RNO airline executive decision makers.  Enhance relationships with local, national and international freight forwarders.  Forge strong airline relationships through a combination of conference and headquarters meetings.

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 Use marketing and resort relationships to maintain status as the “Gateway to Lake Tahoe”.  Determine and report the level of air carrier activity at RNO by completing a Monthly Flight Schedule.  Research and report the monthly and year-to-date Passenger and Air Cargo Statistics.  Research and monitor the current route health of existing flights at RNO.

Air Service Development - Initiatives:

FY 2016-17 Current Initiatives

1. Schedule and hold incumbent air carrier meetings outlining specific market proposals.

Strategic Initiative / Guiding Principle: Increase Air Service.

Description: This effort will develop and present route analyses and business plans to support existing air service and promote new air service opportunities.

Performance Measurement: Hold meetings with incumbent air carriers at least twice (2x) in the fiscal year ending June 30, 2017.

Progress: 100% Complete. Staff held thirty-seven (37) meetings with incumbent carriers during FY 2016-17. With eight (8) incumbent passenger air carriers, this goal has been achieved.

2. Schedule and hold air service development meetings with air carriers including route analyses and next steps.

Strategic Initiative / Guiding Principle: Increase Air Service.

Description: This initiative involves the development of realistic business opportunities at RNO, which may include incentives, marketing support, and risk mitigation available from the community.

Performance Measure: Presentation of thirty-five (35) route analyses by June 30, 2017.

Progress: 100% Complete. Staff prepared and presented forty-one (41) route analyses to air carriers. These analyses were presented to both incumbent and potential new airlines.

3. Continue education of the communities and business stakeholders in the RNO air service catchment area regarding air service development.

140 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Strategic Initiative / Guiding Principle: Increase Air Service.

Description: Conduct education sessions with tourism sales representatives, business leaders, and civic organizations to educate the community about air service development. These sessions will also promote increased loyalty to existing air carriers serving RNO.

Performance Measure: Meet with at least twenty (20) key community and business stakeholders to educate and promote RTAA air service development by June 30, 2017.

Progress: 100% Complete. Staff met with twenty-two (22) key community and business stakeholders to educate and promote RTAA air service by June 30, 2017.

The RTAA has made significant progress in the development of educational programs in support of air service. This included formalizing a Community Outreach Program, the development of an Outreach list, which included various chambers of commerce, and the development of an editorial calendar.

In addition, staff in FY 2015-16 developed a presentation titled “Air Service 101”, which provides travel and community groups an overview of air service development, an airline business overview, key economic factors and considerations from the airline’s perspective, and the opportunities/ changes faced by RNO. To enhance this presentation, airline representatives were invited to the Reno-Sparks community and were integral to the presentation including the question and answer sessions that followed.

On August 12, 2016, staff gave an updated Air Service 101 presentation to the 2016 Leadership Reno-Sparks class during the Economy Day Workshop. There were approximately 30 members of the program in attendance and it was a great opportunity to build awareness for air service with tomorrow’s leaders.

RTAA staff in partnership with the Community Outreach Committee (COC) also hosted a special air service event titled “It Takes a Team to Win the Air Service Game”. The event garnered about 75 guests from the local tourism and business community to hear about the future of air service in our region. Mike Boyd from Boyd Group International was the special guest speaker.

Staff also attended all marketing and board meetings of the Regional Air Service Corporation.

Other community air service presentations in FY 2016-17 included the following: 1. U.S. Senator Catherine Cortez Masto (September 2016) 2. Pathways to Aviation, the former Reno Air Racing Foundation, whose purpose is to foster education programs and spark interest in careers in aviation and aerospace industry (September 2016)

141 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

3. Annual Nevada League of Cities & Municipalities (NLC&M) Conference (October 2016) 4. Economic Development Authority of Western Nevada (EDAWN) (October 2016); 5. Northern Nevada Business Weekly’s 2nd Annual Book of Lists Launch Party and Northern Nevada’s Most Influential People Panel Discussion (January 2017) 6. Nevada Indian Territory - home to the Washoe, Northern Paiute, Western Shoshone, and Southern Paiute tribes (January 2017) 7. City of Reno – Mayor’s City of the State Address (January 2017); 8. American Association of Nurse Practitioners – conference marketing in support of the Reno-Sparks Convention and Visitor’s Authority (RSCVA) (February 2017) 9. Nevada Senate and the Assembly Committees on Transportation (February 2017) 10. All four (4) appointing local government entities to the RTAA Board (May 2017 through June 2017). 11. Vail Resorts (June 2017)

4. Target a minimum of four (4) new air service markets in FY 2016-17 in order to maintain an average number of fifteen (15) city destinations.

Strategic Initiative / Guiding Principle: Increase Air Service.

Description: Prior to the start of the FY 2016-17, RTAA had domestic, year round service to twelve (12) destinations, which includes Chicago O’Hare, Dallas/ Fort Worth (DFW), Denver, Las Vegas, Los Angeles, New York, Phoenix, Portland, Salt Lake City, San Francisco, San Jose, and Seattle. In addition, seasonal non-stop service was available to three (3) cities including Chicago Midway, Houston, and Minneapolis/St. Paul. Scheduled international service was also available to Guadalajara, Mexico.

Performance Measure: Maintain an average of fifteen (15) destinations during FY 2016-17.

Progress: 100% Complete. As of June 30, 2017, RTAA has domestic, year round service to twenty-two (22) destinations. During the year, additional non-stop, year round service was added to the following four (4) cities: Boise, Long Beach, Oakland, and Orange County (John Wayne). In addition, seasonal non-stop service was added to Atlanta and Dallas Love Field.

In addition, the RTAA maintained all non-stop destinations and added additional flights to Chicago O’Hare, Guadalajara Mexico, and San Jose.

5. Enhance airline representative visits to the Reno-Tahoe Region.

Strategic Initiative/Guiding Principle: Increase Air Service.

142 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Description: Bring airline representatives to the Reno-Tahoe region as guests to showcase the area through the use of private invitations, Air Service 101 participation, special event attendance and more.

Performance Measure: Twenty-two (22) airline representative visits to Reno-Tahoe region by June 30, 2017.

Progress: 100% Complete. Seventy-seven (77) representatives visited the region by June 30, 2017. In conjunction with the Boyd Group - International Aviation Forecast summit, fifty- seven (57) airline representatives attended the National Championship Air Races. In addition, the RTAA received additional visits from representatives of JetBlue, Southwest, SkyValue, United and Volaris.

6. Host Airline Representative Attendees at the Boyd Group International – International Aviation Forecast Summit.

Strategic Initiative/Guiding Principle: Increase Air Service.

Description: Host 2016 Boyd Aviation International Forecast Summit and attract airline representatives to the region to attend the conference.

Over the last two decades, the Summit has evolved into the industry’s most prestigious and insightful air service event bringing together the world’s most influential and respected airline and airport professionals.

For the RTAA and the Reno-Sparks-Tahoe region, the Summit, with approximately 450-500 attendees, delivers unparalleled exposure to airline decision-makers from around the globe, as well as major players in the industry including aviation media, financial institutions and aircraft manufacturers and suppliers.

Performance Measure: Obtain attendance of a minimum of 60 airline representatives attending the Boyd Aviation International Forecast Summit in September 2016.

Progress: 100% Complete. The 2016 Boyd International Aviation Forecast Summit was held on September 16 through 21, 2016. The successful conference not only gave the RTAA an opportunity to showcase the region to many in the aviation industry, but provided the Board of Trustees and staff the opportunity to promote RNO to the following:

• 62 Airline representatives (approximately ½ were executive level or higher) • 16 Media representatives • 10 Aircraft Manufacturer representatives

143 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

7. Continue support and coordination with the community Risk Mitigation Program (i.e. marketing and/or funding) to bring new air service to RNO.

Strategic Initiative / Guiding Principle: Increase Air Service.

Description: While the RTAA is not permitted to provide any financial assistance to airlines other than the waiver of certain rates and charges and marketing of new routes as allowed in the FAA policy, staff can facilitate relationships and assist the Regional Air Service Corporation (RASC), Ski Lake Tahoe and Business Advisory Council in building compelling business case solutions for airlines.

Performance Measure: In compliance with FAA guidelines, assist in the development of one (1) new non-stop flight supported with marketing or other mitigation actions funded by the local community during FY 2016-17.

Progress: 100% Complete. In FY 2016-17, RASC provided three (3) risk mitigation packages in support of new air service to Long Beach by JetBlue, Atlanta by Delta, and Dallas Love Field by Southwest.

8. Facilitate effectiveness and pro-activeness of the Regional Air Service Corporation (RASC).

Strategic Initiative / Guiding Principle: Increase Air Service.

Description: The Regional Air Service Corporation is a corporation formed for the purpose of supporting air service to the RNO catchment area. By retaining and expanding membership by local businesses, the available funding and marketing support to provide risk mitigation is expanded.

Performance Measure: Maintain membership during FY 2016-17 in RASC at seventeen (17) members or greater.

Progress: 100% Complete. The membership is twenty-three (23) members as of June 30, 2017.

9. Continue monthly outreach to community partners on air service initiatives (i.e. new flights, fare sales, mileage program promotions).

Strategic Initiative / Guiding Principle: Increase Air Service.

Description: To retain existing air services and support new markets, this initiative is to promote and increase community awareness of flight options available at RNO.

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Performance Measure: Issue twelve (12) community-wide outreach messages by June 30, 2017.

Progress: 100% Complete. Starting in October of 2016, RTAA staff developed and is now distributing a weekly airfare deals newsletter. The distribution list for the weekly newsletter is currently 245 e-mail addresses, which include hoteliers (who distribute the newsletter to their employees as well as e-mail databases) and Chambers and Visitors Bureaus (who distribute the newsletter to their members). It is estimated that the “extended reach” of the newsletter is over 10,000 people weekly.

Through June 30, 2017, thirty-nine (39) newsletters have been distributed. In addition, community wide messages were sent in support of the Community Outreach Committee (COC) special air service event titled “It Takes a Team to Win the Air Service Game” and the Boyd International Aviation Forecast Summit.

10. Develop and present air cargo business plans to domestic and international cargo carriers and identify new air cargo opportunities through outreach to cargo stakeholders (airlines, freight forwarders shippers, and end users).

Strategic Initiative / Guiding Principle: Expand Cargo Development and Service.

Description: Meet with carriers, forwarders, end users and other air cargo entities to enhance existing relationships and develop new opportunities. This effort will share new regional developments and enhance RTAA understanding of future schedule plans. These meetings will also include comprehensive business cases in support of additional cargo air service in the Northern Nevada Region.

Performance Measure: Hold at least one meeting each with DHL, FedEx and United Parcel Service (UPS) by June 30, 2017. Retain all air cargo carriers at RNO and use best, commercially reasonable efforts to maintain and increase annual cargo pounds and cargo aircraft capacity, as measured by landed weight.

Progress: 100% Complete. RTAA staff held seven (7) meetings with cargo carriers, forwarders, end users and other air cargo entities. For the twelve months ending June 30, 2017, cargo volume as measured in annual cargo pounds is 4.9% above the same period last year and cargo landed weight, as measured in 1,000 lb. units, is up 5.2%.

FY 2017-18 New Initiatives

1. Schedule and hold air service development meetings with new and incumbent air carriers including route analyses and market opportunities.

Strategic Initiative / Guiding Principle: Increase Air Service.

145 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Description: This initiative involves the development of realistic business opportunities at RNO for air carriers including possible incentives, marketing support, and risk mitigation available from the community.

Performance Measure: Hold meetings with the eight (8) incumbent carriers and present thirty-five (35) route analyses to incumbent and new carriers by June 30, 2018.

2. Conduct education sessions on the RTAA’s air service development program to local community and business stakeholders.

Strategic Initiative / Guiding Principle: Increase Air Service.

Description: This initiative will conduct education sessions with tourism sales representatives, business leaders, and civic organizations to educate the community about air service development. These sessions will also promote increased loyalty to existing air carriers serving RNO.

Performance Measure: Hold at least four (4) community and business stakeholders sessions to educate and promote RTAA air service development by June 30, 2018.

3. Increase airline representative visits to the Reno-Tahoe Region.

Strategic Initiative/Guiding Principle: Increase Air Service.

Description: This initiative will bring airline representatives to the Reno-Tahoe region as guests to showcase the area through the use of private invitations, Air Service 101 participation, special event attendance and more. Experience has shown that first-hand knowledge and familiarity with the RNO catchment market improves the RTAA’s ability to demonstrate new business opportunities.

Performance Measure: Twenty-two (22) airline representative visits to Reno-Tahoe region by June 30, 2018.

4. Closely cooperate with the Regional Air Service Corporation (RASC) in its efforts to encourage new air service through risk mitigation and new route marketing.

Strategic Initiative / Guiding Principle: Increase Air Service.

Description: Under FAA policy, the RTAA is not permitted to provide any financial assistance to airlines other than the waiver of certain rates and charges and providing marketing of new routes. However, staff can facilitate relationships and cooperate closely with the Regional Air Service Corporation (RASC).

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The RASC is a corporation formed for the purpose of supporting air service to the RNO catchment area. By retaining and expanding membership by local businesses, the available funding and marketing support of new air service through airline risk mitigation is expanded.

Performance Measure: Maintain membership during FY 2017-18 in RASC at twenty-one (21) members or greater.

5. Identify, develop and present air cargo business opportunities to cargo stakeholders (airlines, freight forwarders shippers, and end users).

Strategic Initiative / Guiding Principle: Expand Cargo Development and Service.

Description: This initiative will involve direct meetings with carriers, forwarders, end users and other air cargo entities to enhance existing relationships and develop new opportunities. This effort will share new regional developments and enhance RTAA understanding of future cargo plans. These meetings will also include presenting a comprehensive business case in support of additional cargo air service in the Northern Nevada Region.

Performance Measure: Hold at least one meeting each with DHL, FedEx and United Parcel Service (UPS) by June 30, 2018. Retain all air cargo carriers at RNO and use best, commercially reasonable efforts to maintain and increase annual cargo pounds and cargo aircraft capacity, as measured by landed weight.

147 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

AIR SERVICE BUSINESS DEVELOPMENT

Section 202

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $196,153 324,700 268,800 -17% Vacation Pay 41130 18,598 700 2,500 257% Sick Leave 41140 9,429 400 800 100% Holiday Pay 41150 11,929 0 0 0% Comp Time 41160 699 0 775 % Automobile Allowance 41250 0 2,400 0 -100% Medicare 41320 3,458 4,700 3,900 -17% Group Insurance 41340 27,954 37,600 39,200 4% Disability Insurance 41342 2,274 3,300 3,100 -6% Vision Insurance 41344 362 600 600 0% Dental Insurance 41347 2,504 3,800 3,500 -8% Workers Comp 41350 470 1,000 700 -30% Retirement 41360 61,508 90,900 75,300 -17% Accrued PERS Expense 41365 3,318 0 0 0% Benefit Bank Deferred Comp 41430 0 0 0 0%

TOTAL PERSONNEL SERVICES 338,655 470,100 399,175 -15%

PURCHASED SERVICES Consultants - Genera 43140 2,320 0 0 0% Other Professional Services 43190 0 0 0 0% Office Equipment Renta 43210 1,194 600 600 0% Contracted Services 43340 0 0 0 0% Freight Expense 43430 916 1,000 1,000 0% Other Purchased Services 43490 69 70 70 0%

TOTAL PURCHASED SERVICES 4,500 1,670 1,670 0%

MATERIALS & SUPPLIES Office Supplies 44100 153 500 500 0% Paper 44110 0 250 250 0% Postage 44120 050500% Printing & Forms 44130 398 200 200 0%

TOTAL MATERIALS & SUPPLIES 550 1,000 1,000 0%

ADMINISTRATIVE EXPENSE Membership Dues 45110 2,425 3,035 850 -72% Conference Registration Fees 45130 8,907 8,500 20,479 141% Training Expense 45140 25 000% Meeting Expense 45150 3,810 4,500 4,500 0% Travel & Reimbursed Expense 45210 27,343 44,200 66,600 51% Travel&Reimb Exp-Air Svc Task 45211 1,622 7,800 7,800 0% Air Service Developmen 45350 15,912 10,000 33,000 230% Other Advertising & Promotion 45390 23,764 20,000 20,000 0% Conference Sponsorship 45391 0 100,000 10,000 -90%

TOTAL ADMINISTRATIVE EXPENSES 84,014 198,035 163,229 -18%

TOTAL SECTION EXPENSES $427,719 $670,805 565,074 -16%

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Marketing and Public Affairs

Mission Statement: Provide public information to the news media on a 24 hours / 7 days a week basis and continually enhance the image of the RTAA and its airports through public awareness activities and services.

Key Duties and Responsibilities:  Provide airport information and community outreach through various forms of media and programs.  Maintain and enhance customer service and community outreach by hosting staff and community meetings, as well as holding press conferences.  Enhance service through the customer service feedback program, including answering Ask the Airport and social media questions.  Work with RTAA staff, airlines, tenants and community partners to create targeted customer service programs that help passengers have a positive travel experience, especially during peak travel times.  Optimize communication of airport activities, events and services.  Implement emergency and crisis response programs.  Provide equipment for the day-to-day operation and documentation of public relations, marketing and customer service programs.  Utilize social media as a full-fledged marketing, public relations, and customer service tool.  Use in-house graphic skills to enhance presentations, web site, social media, invitations, economic development promotions and advertisements.  Maintain membership and attendance at monthly community meetings to extend community outreach and continue professional development.  Remain informed on media issues, record news stories and share media reports with staff.  Compile and report quarterly statistics from media monitoring service.  Provide airport information through media interviews and maintain positive media relations.  Send media alerts for every publicity opportunity to media outlets including press releases, social media, web and phone calls  Use magazine display advertising to promote convenience of using Reno-Tahoe International Airport (RNO) to potential regional and national passengers.  Improve organizational communication through newsletters and employee notices.  Provide for an RNO Art Plan and program.  Maintain and update RTAA’s Website.  Communicate airport construction impacts to customers and community.  Coordinate at least four quarterly Community Outreach Committee (COC) Meetings.  Continue RTAA’s music events in the terminal building, including holiday and Artown performances.

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 Design and help maintain land development marketing materials.  Provide RNO Holiday decorations.  Coordinate with the Reno-Sparks Convention and Visitors Authority (RSCVA), airlines, Transportation Security Administration (TSA), tenants and staff to provide outstanding service to conventions.  Maintain and enhance partnership marketing opportunities with organizations such as University of Nevada, Reno-Tahoe Open, American Century Celebrity Golf Tournament, Nevada Military Support Alliance, KNPB Public Television, Burning Man, State of Nevada Indian Commission and Nevada Mining Association.  Promote RTAA’s corporate aviation potential through yearly attendance at national events.  Provide supplies for showcasing honors, awards and RTAA milestones.

Marketing and Public Affairs - Initiatives:

FY 2016-17 Current Initiatives

1. Plan and coordinate the Boyd Group International Aviation Forecast Summit.

Strategic Initiative / Guiding Principle: Increase Air Service.

Description: Host the 2016 Boyd International Aviation Forecast Summit, welcoming approximately 500 attendees, including airline CEOs and key executives, airport representatives and aircraft manufacturers.

Over the last two decades, the Summit has evolved into the industry’s most prestigious and insightful air service event bringing together the world’s most influential and respected airline and airport professionals.

For the RTAA and the Reno-Sparks-Tahoe region, the Summit delivers unparalleled exposure to airline decision-makers from around the globe, as well as major players in the industry including aviation media, financial institutions and aircraft manufacturers and suppliers.

Performance Measure: Execute a successful conference with positive feedback.

Progress: 100% Complete. The 2016 Boyd International Aviation Forecast Summit was a great success. The conference showcased our region and gave RTAA staff and board members the opportunity to spend quality time with the following attendees:

• 62 Airline representatives (approximately ½ were executive level or higher) many of whom had never been to Reno-Tahoe

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• 16 Media representatives • 10 Aircraft Manufacturer representatives

2. Implement an in-terminal and on-line customer service survey program.

Strategic Initiative / Guiding Principle: Provide a Positive Environment and Experience for All.

Description: Encourage airport passenger/guest feedback through one-on-one survey requests and on-line capability to continually improve customer satisfaction

Performance Measure: Develop a baseline measurement for FY 2017/18 and future comparisons.

Progress: 100% Complete. During FY 2016-17, staff completed four (4) person-to-person, quarterly intercept surveys with an average of 300 responses per quarter. In addition, the RTAA also provided an on-going, on-line survey that averaged 50 responses per quarter.

3. Continue the Air Service Community Awareness Program to educate the community on RNO air service.

Strategic Initiative / Guiding Principle: Increased Air Service.

Description: Going into FY 2016-17, staff developed and obtained Board approval to kick off a local advertising campaign focused on raising the region’s air service awareness and promotion of local flying to fill the seats of new and existing service. The need for this campaign was the result of a public survey that indicated the community was unaware that RNO had 12 out of the 20 destinations in a “Passenger Wish List” for new non-stop service.

The campaign will be multi-faceted, on various platforms including TV, radio, social media, outdoor billboards, in-terminal advertising and print. In addition, this campaign will outreach to business, travel, and political leaders using the Community Outreach Program outlined above.

Performance Measure: Tracking of advertising campaign reach (defined by audience numbers and geographical area) and increased awareness of RNO air service as validated through in-person and website survey responses.

Progress: 100% Completed. RTAA staff launched the Non-Stop Getaways from RNO promotion in mid-March. By giving away two (2) round trip tickets, hotel and a $200 visa gift card to one of the RTAA’s 23 non-stop destinations each week, the campaign aimed to raise awareness of the eight passenger airlines based at RNO and to raise awareness of the

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non-stop locations to which the airlines fly. In the first ten weeks, the campaign received more than 33,000 unique entries total and trips to Seattle and San Diego proved particularly popular. The campaign will continue into early summer, and vignettes and stories about the winners and their impending trips are available at http://renoairport.com/getaways-winners.

4. Coordinate four (4) Community Outreach Committee (COC) meetings annually.

Strategic Initiative / Guiding Principle: Increase Air Service and Provide a Positive Environment and Experience for All.

Description: Plan and facilitate Community Outreach Committee Meetings in order to promote and assist in greater community awareness of RTAA plans and initiatives, including air service goals and objectives.

Performance Measure: Hold a minimum of four (4) meetings a year.

Progress: 100% Completed. During FY 2016-17, the COC committee held five (5) meetings. The committee received updates and provided feedback on the following RTAA initiatives:

 The Airport Community Advertising Campaign and the RTAA’s efforts to educate the local community on the excellent air service offered at RNO.  The Unmanned Aircraft System (UAS) industry and the RTAA’s role in encouraging its development in Northern Nevada.  The RNO Master Plan and community outreach efforts.  General Aviation and its significant role at both airports. This included a tour of the Dassault Falcon Maintenance Facility and a stop at Atlantic Aviation to see the new terminal and hangar area.

5. Grow social media reach by expanding the number of Facebook likes and Twitter followers.

Strategic Initiative / Guiding Principle: Increase Air Service and Provide a Positive Environment and Experience for All.

Description: With the growth of social media over the years, this communication tool has become vital in the ability of the RTAA to reach an increasing number of its customers. This initiative is to provide interesting content and provide timely information regarding airport operations and air service that expands the reach of this tool.

Performance Measure: Increase social media usage by 15%, as measured by Facebook likes and Twitter followers, over levels in place as of June 30, 2016.

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Progress: As of June 2017, the RTAA’s Facebook followers are currently at 13,929, with a monthly reach of 1.8 million, and Twitter followers are at 7,335. This represented an increase of 21% and 17%, respectively. Marketing and Public Affairs staff recently encouraged our followers to spread the word about the workshop being held to help local businesses participate in the upcoming Retail/Food & Beverage Request for Proposal (RFP) process.

In addition, the Non-Stop Getaways from RNO program continues to be a success and the weekly destinations and winners continue to be featured on Facebook and promoted at #RNOGetaways. In addition, the drones out at Reno-Stead Airport (RTS), which practiced flying in crowded airspace and dropping a package of simulated survival supplies like hand warmers, fire blankets, and flashlights in a safe manner, was shared with our followers.

6. Continue the RTAA Art Program and its support of the creative arts.

Strategic Initiative / Guiding Principle: Provide a Positive Environment and Experience for All.

Description: Plan and host rotating exhibits in the depARTures gallery at RNO and maintain and enhance the Reno-Stead Airport: A Proud History display. This will include the coordination of community partnership art displays.

Performance Measure: Organize four (4) art exhibits annually.

Progress: In FY 2016-17, the RTAA held three (3) art exhibits. The exhibits included the 9th Annual Employee Art Show unveiling that took place on May 24, 2017 with entries from more than 80 artists in the mediums of photography, painting, mixed media, sculpture, and more. Sponsored by the National Art’s Program Foundation, the Employee Art Show included more than 135 pieces of artwork with awards presented in all categories, including Best of Show.

In addition, the depARTures Gallery Exhibits included a Burning Man: Pinhole Exhibit and a Truckee Meadow Parks Foundation Exhibit.

7. Maintain and enhance positive public relations through media interviews.

Strategic Initiative / Guiding Principle: Provide a Positive Environment and Experience for All.

Description: Conduct interviews to communicate with the community through local and national media outlets. This initiative is to work cooperatively with media representatives to promote RTAA.

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Performance Measure: Conduct media interviews that result in more than 300 minutes of broadcast air time as measured by TV Eyes Media Monitoring Services.

Progress: 100% Completed. Through June 2017, a total coverage is 1,157 minutes or 19.27 hours of news coverage was recorded based on the benchmark of an average of 45 seconds per news clip.

8. Execute Triennial Full-Scale Disaster Drill – Test customer service reaction and create customer service emergency procedures.

Strategic Initiative / Guiding Principle: Safety and Security and Customer Service.

Description: Test customer service emergency contingency and crisis response in the event of an aircraft incident

Performance Measure: Evaluation of challenges and creation of post-drill customer service emergency procedures for aircraft incidents.

Progress: 100% Completed. On May 2, 2017, the full-scale disaster exercise, Broken Wing, was successfully held. While the RTAA holds a variety of emergency drills on a regular basis year-round, the Federal Aviation Administration (FAA) requires a full-scale drill in partnership with regional emergency responders and public safety agencies every three years. This year’s drill tested staff’s ability to establish a Friends and Relatives Center to respond to victims’ family and friends. This exercise also tested the ability of staff to address customer service needs in the RNO Terminal Building.

In April 2017, the National Transportation Safety Board (NTSB), in coordination with the RTAA, also conducted the Airport Disaster Response & Family Assistance Workshop at the . The purpose of the two-day workshop was to help prepare organizations to respond and support families and survivors of a major aviation disaster. The workshop focused on the lessons learned from previous accidents, recommended items for local plans, and identified what to expect in the first 24 hours of an aviation disaster.

The workshop was attended by RTAA staff and community emergency response groups along with other community volunteer organizations. Attendees also included representatives from Sacramento, Salt Lake City, and Fresno Yosemite International Airports, and several Medical Examiner/Coroner offices.

FY 2017-18 New Initiatives

1. Continue RNO in-terminal customer service survey program as well as electronic surveys on the RTAA website. In FY 2017-18, this program will be enhanced with a full-scale, triennial survey.

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Strategic Initiative / Guiding Principle: Provide a Positive Environment and Experience for All.

Description: Encourage airport passenger/guest feedback through one-on-one survey requests and on-line capability to continually improve customer satisfaction

Performance Measure: Completion of full scale customer satisfaction survey by June 30, 2018.

2. Maintain and enhance positive public relations through media interviews.

Strategic Initiative / Guiding Principle: Provide a Positive Environment and Experience for All.

Description: Conduct interviews to communicate with the community through local and national media outlets. This initiative is to work cooperatively with media representatives to promote RTAA. In FY 2017-18, this initiative will use New Media Monitoring Service, an enhanced media measuring service, to measure and quantify the reach and coverage of the RTAA’s public relations and marketing efforts.

Performance Measure: Using this new monitoring service, staff will develop an accurate baseline measurement standard during FY 2017-18. This baseline will be used to establish performance goals in the future.

3. Provide timely, comprehensive and accurate responses to customer questions or inquiries received through social media or the RTAA website. In addition, on-call customer service teams will continue to support Customs and Border Protection (CBP) passenger processing and RNO in-terminal customer service.

Strategic Initiative / Guiding Principle: Provide a Positive Environment and Experience for All.

Description: Air travel can sometimes be a frustrating and confusing experience especially with unpredictable weather, flight delays and changing TSA security requirements. This initiative will focus on providing RTAA customers with information and guidance to assist them in making travel plans and associated decisions.

In addition, this program involves hiring and training part-time employees who are bi-lingual in English and Spanish to assist international arriving passengers with information and guidance on clearing customs at RNO. In addition, these employees provide customer service in support of special events and conduct the in-terminal customer satisfaction surveys.

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Performance Measure: A response will be provided within 24 business hours of receipt of a question or inquiry. In some cases, the RTAA response may be an acknowledgement of receipt pending a more detailed response if information is required from an airport tenant or technical subject matter. A monthly summary report will be provided to the Board of Trustees by the President/CEO.

4. Continue Air Service Community Awareness Campaign to promote and educate the community on RNO air service.

Strategic Initiative / Guiding Principle: Increased Air Service.

Description: In FY 2016-17, staff developed and obtained Board approval to kick off a local advertising campaign focused on raising the region’s air service awareness and promotion of local flying to fill the seats of new and existing service. The need for this campaign was the result of a public survey that indicated the community was unaware that RNO had 12 out of the 20 destinations in a “Passenger Wish List” for new non-stop service.

The campaign will be multi-faceted, on various platforms including TV, radio, social media, outdoor billboards, in-terminal advertising and print. In addition, this campaign will outreach to business, travel, and political leaders.

This second phase of the air service education program will focus on further reinforcing and increasing awareness of flights and markets served.

Performance Measure: Tracking of advertising campaign reach (defined by audience numbers and geographical area) and increased awareness of RNO air service as validated through in-person and website survey responses.

5. Complete an Economic Impact Study measuring the benefit of the RTAA’s airports on the Northern Nevada region.

Strategic Initiative / Guiding Principle: Facilitate Economic Development at Both Airports.

Description: Conduct an update of the annual economic impact of RNO and RTS and what it means for our region.

Performance Measure: Complete the economic impact study by June 30, 2018.

6. Conduct RNO Master Plan Community Outreach Program.

Strategic Initiative/Guiding Principle: Provide a Positive Environment & Experience.

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Description: Conduct community outreach efforts in support of the RNO Master Plan process.

Performance Measure: Coordinate Master Plan website, surveys and conduct eleven (11) public meetings, which includes the Master Plan working groups by June 30, 2018.

7. Execute Reno-Stead Airport (RTS) 75th Anniversary Celebration.

Strategic Initiative/Guiding Principle: Optimize General Aviation Operations and Services and Provide a Positive Environment & Experience.

Description: Celebrate the colorful history and promote the economic potential of RTS with a commemorative event.

Performance Measure: Execute a successful event by December 31, 2017.

8. Coordinate and host Operation Santa Claus at RNO.

Strategic Initiative/Guiding Principle: Optimize General Aviation Operations and Services and Provide a Positive Environment & Experience.

Description: This holiday event, held in conjunction with the RNO general aviation community, provides gifts to less fortunate children in our community.

Performance Measure: Execute a successful event by December 31, 2017.

10. Continue to grow social media reach by expanding the number of Facebook likes and Twitter followers.

Strategic Initiative / Guiding Principle: Increase Air Service and Provide a Positive Environment and Experience for All.

Description: With the growth of social media over the years, this communication tool has become vital in the ability of the RTAA to reach an increasing number of its customers. This initiative is to provide interesting content and provide timely information regarding airport operations and air service that expands the reach of this tool.

Performance Measure: Increase social media usage by 5%, as measured by Facebook likes and Twitter followers, over levels achieved as of June 30, 2017.

157 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

MARKETING AND PUBLIC AFFAIRS

Section 203

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $453,867 571,700 602,800 5% Temporary Employees 41120 24,839 40,000 38,000 -5% Vacation Pay 41130 51,826 6,500 4,700 -28% Sick Leave 41140 44,618 6,100 7,500 23% Holiday Pay 41150 26,766 0 0 0% Comp Time 41160 1,641 0 0 0% Overtime Pay 41210 131 0 0 0% 41220 0 7,000 7,000 0% Automobile Allowance 41250 4,616 4,800 4,800 0% Medicare 41320 9,086 8,300 8,700 5% FICA 41321 1,996 0 0 0% Group Insurance 41340 50,938 62,900 55,400 -12% Disability Insurance 41342 4,421 5,600 5,000 -11% Vision Insurance 41344 797 1,000 800 -20% Dental Insurance 41347 6,349 6,500 5,000 -23% Workers Comp 41350 564 700 800 14% Retirement 41360 149,499 160,100 168,000 5% Accrued PERS Expense 41365 7,732 0 0 0% Uniform Allowance 41380 278 1,000 1,000 0%

TOTAL PERSONNEL SERVICES 839,965 882,200 909,500 3%

PURCHASED SERVICES Consultants - General 43140 563 5,000 5,000 0% Other Professional Services 43190 2,664 33,870 74,610 120% Office Equipment Rental 43210 4,925 4,000 4,000 0% Freight Expense 43430 1,303 600 1,000 67% Other Purchased Services 43490 204 400 18,530 4533%

TOTAL PURCHASED SERVICES 9,658 43,870 103,140 135%

MATERIALS & SUPPLIES Office Supplies 44100 6,317 10,000 10,000 0% Paper 44110 68 500 500 0% Postage 44120 596 400 500 25% Printing & Forms 44130 870 600 600 0% Office Small Equipment 44410 996 0 0 0% Sign and Sign Maintenance 44430 814 3,000 3,000 0%

TOTAL MATERIALS & SUPPLIES 9,661 14,500 14,600 1%

ADMINISTRATIVE EXPENSES Membership Dues 45110 5,298 15,335 12,995 -15% Books & Subscriptions 45120 602 3,875 5,158 33% Conference Registration Fees 45130 795 2,595 2,840 9% Training Expense 45140 0 2,500 2,500 0% Meeting Expense 45150 904 2,450 2,450 0%

158 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

MARKETING AND PUBLIC AFFAIRS

Section 203

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE Travel & Reimbursed Expense 45210 2,935 6,000 6,000 0% Air Service Development 45350 21,662 180,000 200,000 11% Other Advertising & Promotion 45390 42,283 39,500 47,660 21% Art Program 45393 3,448 3,250 4,000 23% Community Outreach 45398 176,557 180,750 167,708 -7%

TOTAL ADMINISTRATIVE EXPENSES 254,486 436,255 451,311 3%

TOTAL EXPENSES BEFORE FIXED ASSETS 1,113,770 1,376,825 1,478,551 7%

FIXED ASSETS Fixed Asset Acquisition 48150 0 0 45,750 %

TOTAL SECTION EXPENSES $1,113,770 $1,376,825 1,524,301 11%

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Airport Economic Development

Mission Statement:

The Airport Economic Development (AED) Department serves to attract, retain, and expand the variety and number of in-terminal, non-airline revenue tenants, as well as its on- and off- airport tenant base, resulting in long-term leases and increased non-airline revenue. AED monitors and supports airline tenants (passenger, cargo and ground handlers), as well as rental car operators, in-terminal concessions, including food and beverage, retail, gaming, advertising, luggage carts, ATMs and other services. Additionally, AED oversees approximately 200 general aviation tenants and effectively manages real property assets at both Reno-Tahoe International Airport (RNO) and Reno-Stead Airport (RTS).

AED strives to keep operating costs as low as possible for the airlines, provide exceptional food and beverage and retail concessions and service opportunities for the traveling public, offer superior general aviation facilities and services, provide supporting contract administration, provide property management and land development services, and attract new aviation- compatible businesses through land development opportunities.

Key Duties and Responsibilities:

 Manage approximately 1,000 leases/contracts for both RNO and RTS.  Manage the Tenant Improvement process, oversee lease compliance and manage customer relations for all tenants at RNO and RTS, including government agencies such as the FAA, TSA, NANG and NDOT.  Request RTAA-owned facility assessments to identify and correct deferred maintenance in order to increase utilization, occupancy rates, and revenue.  Optimize the use of the property management software and focus on system updates and data monitoring to ensure the following: (1) accurate billing statements each month to ensure revenue stream; (2) ensure that all active lease information is entered, monitored and maintained; and (3) manage effectively all lease compliance activities.  Provide excellent communication, service and product delivery to customers, stakeholders, and internal RTAA divisions.  Support employee training to ensure staff stays current with industry knowledge, trends, and best practices.

Concessions  Review the services and products offered to the traveling public with a focus on the following: (1) increasing sales; (2) refreshing services and products; (3) providing excellent value and customer satisfaction; (4) increasing the customer service performance of all retail, food and beverage, in-terminal services, and rental car operators; and (5) improving the airport environment and experience.

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 Issue Requests for Proposals (RFPs) for concession opportunities, as appropriate, to optimize Terminal revenue per square foot and optimize non-airline revenue.  Provide contract support for community partnership agreements and specialty display opportunities, including coordination and oversight of the display installations.  Work closely with the RTAA advertising concessionaire to: (1) update the advertising program; (2) review and revise, as necessary, the advertising locations and refresh the concepts to attract and diversify; and (3) retain and expand client marketing opportunities.  Participate in the Nevada Unified Certification Program (NUCP) for certification of Airport Concession Disadvantaged Business Enterprises (ACDBE) and, as a certifying agency, manage continuing certification compliance requirements.  Oversee and manage rental car concession and service-storage facility leases at RNO including use of customer facility charge (CFC) revenue to maintain and improve RTAA- owned rental car facilities.

Airlines, Cargo, and Aviation Support Services  Manage RNO terminal airline space including Counter and Airline Ticket Office, Baggage Service Office, Operations, Gate and Holdroom space.  Coordinate and ensure signatory and non-signatory airline contract compliance as outlined in the Airline-Airport Use and Lease Agreements and Airline Operating Agreements.  Provide communication and maintain customer relations with local and corporate airline representatives including attending Airline Station Managers and Airline Airport Affairs Committee meetings.  Originate and manage contracts and compliance for air cargo operations.  Originate and manage contracts for all ground handler/aviation support services.  Coordinate charter aircraft operations and compliance.

General Aviation at RNO and RTS  Support a vibrant General Aviation community by optimizing services at both airports.  Prepare leases and manage general aviation box hangars at RNO including billing, compliance and repair and maintenance.  Work with the Fixed Based Operator (FBO) to manage general aviation T-hangar tenants at both airports.  Manage public processes for general aviation tenants and tenant services at both airports.  Attend regularly held general aviation meetings including the Stead Airport Users Association, the Reno-Tahoe Aviation Group and the RNO User Committee.  Develop, implement and revise General Aviation Minimum Standards (GAMS) for both airports.

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Outside Properties  Perform market rate surveys using best practices to remain competitive in marketing all RTAA owned non-aeronautical facilities.  Perform needed repairs, preventative maintenance, and capital improvements, as appropriate, to maintain the facilities in leasable condition.  Manage the Airport Mini-Warehouse, Park to Travel, 1280 Terminal Way and other commercial properties and government facilities with a focus on increasing utilization, occupancy and revenue.  Negotiate and draft commercial leases.  Provide full-service property management to all commercial tenants in RTAA owned buildings.

Land and Economic Development at RNO and RTS  Lead and/or work closely with the state and local economic development agencies and other community partners, to proactively attract and expand business opportunities and capital investment at both airports.  Work with appraisers, surveyors, title companies and others to evaluate development potential and constraints on RTAA-owned lands.  Meet with prospective tenants, prepare responses to Requests for Information, and maintain broker relations.  Negotiate business terms with prospective tenants and secure Board approval.  Prepare hold harmless and right of entry agreements, draft and negotiate ground leases, and prepare other legal documents in support of tenants and lease negotiations.  Manage the Land Development Tenant Improvement process, working collaboratively with RTAA Planning & Engineering as well as City of Reno Community Development and tenants at both airports.  Maintain relationships with tenants and manage contracts, including RTS Terminal tenants.  Facilitate redevelopment of Airport-owned property as needed.  Facilitate land disposal and acquisition as needed.  Work with the RTS master developer to support implementation of the Master Development Agreement.  Negotiate, prepare and manage the Reno Air Racing Association (RARA) leases and event permits.

Airport Economic Development - Initiatives:

FY 2016-17 Current Initiatives

1. Sale of RTS Surplus Land.

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Strategic Initiative/Guiding Principle: Facilitate Economic Development at Both Airports.

Description: The property that is surplus and available for sale is approximately 25,622 square feet in size and is accessed via a 15’ wide access easement off of Echo Avenue. The RTAA has received interest from a developer to purchase the property in order to develop a new residential community on the adjacent properties. The land has no benefit associated with the operations of RTS and has no role in the future development.

Performance Measure: Obtain FAA approval and complete sale by June 30, 2017.

Progress: 100% Completed. Staff and legal counsel obtained FAA approval and is finalizing a Quit Claim Deed and sale documents to Artisan Communities for the sale of 0.58 acres of land and associated access easement. Staff obtained Board approval for the land sale in July 2017.

Artisan Communities was approved by the City of Reno to construct a 204-home subdivision around the RTAA parcel in February 2016.

2. Develop the Gateway Center Site at RNO.

Strategic Initiative/Guiding Principle: Facilitate Economic Development at Both Airports.

Description: The Gateway Center is under a Letter of Interest with a developer for a new hotel and ancillary services.

Performance Measure: Subject to Board approval of business terms, execute new ground lease for Aloft Hotel and begin design by June 30, 2017.

Progress: 100% Completed. The RTAA executed a ground lease with JMA Reno Hotel Holding, LLC (JMA) on March 1, 2017. The fifty-year agreement is for a 3.0 acre hotel site with a three-year development option on the remaining 4.5 acres at the RNO Gateway Center.

JMA is proposing to develop the vacant land with a two-phased, master plan approach. As the first phase of the development, JMA will construct a hotel on the 3.0 acre site directly north of the existing Hyatt Place Hotel on the corner of Plumb Lane and Terminal Way. The Aloft Hotel will be operated by JMA under a Marriott Franchise Agreement. JMA believes the hotel will fill an untapped market segment by appealing more to the younger (Millennial) traveler. This traveling demographic aligns with the growth in high technology firms in Reno (Tesla, Switch, Apple, etc.).

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The Aloft Hotel will be a four- to five-story, non-gaming property with 168 rooms and a common social area, courtyard, pool and a W xyzsM bar. The W xyzsM bar will be the hub of the hotel designed to encourage guests to mix, meet, and mingle over music and cocktails.

The second phase, under option with JMA for three (3) years, is for the remainder of the 4.5 acre Gateway Center with a focus to develop, market, fund and construct Class A office space and food and beverage facilities that appeal to Hi-Tech business clients and customers.

JMA has completed initial funding on the option land and the next step is to select a commercial broker and create a formal package to test the market.

3. Work with RNO General Aviation (GA) community to adopt GA Minimum Standards (GAMS) to ensure service providers meet standards of service.

Strategic Initiative / Guiding Principle: Optimize General Aviation Operations and Services.

Description: In conjunction with a GA Minimum Standards Advisory Group, review and update RNO GA Minimum Standards to align with RTAA Strategic Priorities. This initiative will include significant stakeholder and GA community outreach.

Performance Measure: Staff recommendation of RNO GA Minimum Standards to full Board of Trustees for discussion and possible action by June 30, 2017.

Progress: 100% Completed. The RTAA Board of Trustees adopted the RNO GAMS on December 8, 2016. Since adoption, the GAMS have been distributed to both commercial and non-commercial RNO general aviation tenants via email, as well as to the members of the Reno-Tahoe Aviation Group (RTAG) and the RNO User Committee. In addition, the adopted GAMS document is posted on the RTAA website. Staff is conducting individual tenant/airport user outreach to discuss the impact and implementation of the newly adopted GAMS.

The adoption represents the culmination of exhaustive research into industry “best practices, including input from technical and legal experts, along with extensive RNO stakeholder outreach, a public workshop and on-going tenant communication.

4. Complete Stead Airport (RTS) General Aviation Minimum Standards (GAMS).

Strategic Initiative/Guiding Principle: Optimize General Aviation Operations and Services.

164 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Description: Complete RTS GA Minimum Standards process initiated in FY15-16 to align with RTAA Strategic Priorities through a RTS GA Minimum Standards Advisory Group and GA community outreach.

Performance Measure: Staff recommendation of RTS GA Minimum Standards to full Board of Trustees for discussion and possible action by June 30, 2017.

Progress: 100% Completed. The RTAA Board of Trustees adopted the RTS GAMS on June 8, 2017. This adoption reflects an extensive RTS stakeholder outreach, which included the formation of the RTS CEO Advisory Group to review and comment on the draft document, a public workshop, extensive technical and legal review, and on-going tenant communication.

FY 2017-18 New Initiatives

1. Diversify RTAA revenues through Reno-Tahoe International Airport Land Development.

Strategic Initiative/Guiding Principle: Economic Development: Maximize all non-airline revenue at both airports.

Description: Attract new tenant and capital investment.

Performance Measure: One new land development deal submitted to the Board of Trustees for approval by June 30, 2018.

2. Diversify RTAA revenues through Reno-Stead Airport Land Development.

Strategic Initiative/Guiding Principle: Economic Development: Maximize all non-airline revenue at both airports.

Description: Working with Master Real Estate Developer to create a strong business environment and attract tenants.

Performance Measure: Participate in four (4) prospective tenant meetings by June 30, 2018.

3. Issue a Request for Proposal (RFP) for retail and/or food/beverage concessions for vacant shell space in the RNO Terminal Building.

Strategic Initiative/Guiding Principle: Non-Airline Revenue: Maximize all non-airline revenue at both airports.

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Description: This initiative is to turn existing shell, vacant space into income producing property.

Performance Measure: Issue RFP and execute new concession agreements, if Board approved, by June 30, 2018.

4. Maintain RNO General Aviation T-Hangars occupancy.

Strategic Initiative/Guiding Principle: Optimize General Aviation & Economic Development: Maximize non-airline revenue at both airports

Description: Maintain facilities to maximize occupancy

Performance Measure: Achieve 85% or better occupancy in FY 2017-18.

5. Promote occupancy and enhance revenue from RNO Outside Commercial Properties.

Strategic Initiative/Guiding Principle: Economic Development: Maximize non-airline revenue at both airports

Description: Market properties and maintain facilities to maximize occupancy.

Performance Measure: Achieve 85% or better occupancy in FY 2017-18.

166 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

ECONOMIC DEVELOPMENT

Section 304

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $555,208 $693,100 $773,200 12% Vacation Pay 41130 50,493 5,400 4,000 -26% Sick Leave 41140 23,872 7,900 7,800 -1% Holiday Pay 41150 34,992 0 0 0% Comp Time 41160 1,230 0 0 0% Overtime Pay 41210 0 1,000 0 -100% Car Allowance 41250 4,616 4,800 4,800 0% Medicare 41320 9,601 10,000 11,200 12% Group Insurance 41340 55,623 67,200 79,900 19% Disability Insurance 41342 5,694 6,900 7,600 10% Vision Insurance 41344 725 900 1,100 22% Dental Insurance 41347 5,366 5,900 6,500 10% Workers Comp 41350 564 800 800 0% Retirement 41360 176,398 194,100 216,500 12% Accrued PERS Expense 41365 7,981 0 0 0%

TOTAL PERSONNEL SERVICES 932,361 998,000 1,113,400 12%

UTILITIES AND COMMUNICATIONS Electricity 42110 1,295 1,500 1,300 -13% Water 42130 9,903 10,000 9,300 -7% Sewer 42140 795 600 800 33%

TOTAL UTILITIES & COMMUNICATIONS 11,993 12,100 11,400 -6%

PURCHASED SERVICES Consultants - General 43140 12,333 10,000 30,000 200% Real Estate Appraising & Neg. 43170 51,483 10,500 13,000 24% Other Professional Services 43190 4,709 15,000 10,000 -33% Office Equipment Rental 43210 7,263 5,000 7,500 50% Land Rental 43240 4,488 4,500 4,500 0% Contracted Services 43340 2,618 5,800 4,300 -26% Other Repair/Maintenance Svc 43390 0 500 0 -100% Freight Expense 43430 1,886 750 800 7% Permits & Recorders Fees 43460 50 250 150 -40% Other Purchased Services 43490 1,376 2,250 2,700 20%

TOTAL PURCHASED SERVICES 86,206 54,550 72,950 34%

MATERIALS & SUPPLIES Office Supplies 44100 4,308 3,000 3,400 13% Paper 44110 368 600 700 17% Postage 44120 314 1,000 400 -60% Printing & Forms 44130 834 1,000 900 -10% Office Small Equipment 44410 0 500 0 -100%

167 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

ECONOMIC DEVELOPMENT

Section 304

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE Sign and Sign Maintenance 44430 0 1,150 0 -100%

TOTAL MATERIALS & SUPPLIES 5,824 7,250 5,400 -26% ADMINISTRATIVE EXPENSE Membership Dues 45110 9,288 10,450 4,000 -62% Books & Subscriptions 45120 1,279 0 1,100 % Conference Registration Fees 45130 5,070 4,350 2,100 -52% Training Expense 45140 699 0 0 0% Meeting Expense 45150 1,920 2,000 2,000 0% Travel & Reimbursed Expense 45210 18,224 12,500 7,900 -37% Employee reimbursed mileage 45240 320 0 0 0% Legal Ads 45340 0 200 600 200% Economic Development 45360 5,819 50,000 50,000 0%

TOTAL ADMINISTRATIVE EXPENSES 42,620 79,500 67,700 -15%

TOTAL SECTION EXPENSES $1,079,004 $1,151,400 1,270,850 10%

168 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

OUTSIDE PROPERTIES

Section 306

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 73,632 105,500 105,700 0% Temporary Employees 41120 5,909 0 0 0% Vacation Pay 41130 6,268 0 0 0% Sick Leave 41140 2,904 600 1,000 67% Holiday Pay 41150 4,204 0 0 0% Workers Comp Pay 41170 2,450 0 0 0% Overtime Pay 41210 1,283 0 0 0% Shift Differential 41230 707 0 0 0% Medicare 41320 1,325 1,500 1,500 0% FICA 41321 202 0 0 0% Group Insurance 41340 21,132 26,700 26,900 1% Disability Insurance 41342 663 700 800 14% Vision Insurance 41344 290 400 400 0% Dental Insurance 41347 2,236 2,800 2,500 -11% Workers Comp 41350 188 400 300 -25% Retirement 41360 23,629 29,500 29,600 0% Accrued PERS Expense 41365 1,195 0 0 0% Uniform Allowance 41380 0 0 0 0%

TOTAL PERSONNEL SERVICES 148,217 168,100 168,700 0%

UTILITIES AND COMMUNICATIONS Electricity 42110 68,456 67,500 68,000 1% Natural Gas 42120 19,425 10,000 12,300 23% Water 42130 16,125 18,500 19,230 4% Sewer 42140 18,161 19,400 20,000 3% Solid Waste Disposal 42150 9,939 8,500 11,500 35%

TOTAL UTILITIES & COMMUNICATIONS 132,105 123,900 131,030 6%

PURCHASED SERVICES Consultants - General 43140 5,687 0 0 0% Consultants - Engineering 43150 23,900 0 50,000 % Other Professional Services 43190 3,152 0 30,000 % Contracted Services 43340 391,091 420,700 526,820 25% Other Repair/Maintenance Svc 43390 309,492 296,210 237,700 -20% Freight Expense 43430 3,930 0 0 0% Permits & Recorders Fees 43460 665 600 605 1% Other Purchased Services 43490 10,149 5,540 8,413 52%

TOTAL PURCHASED SERVICES 748,066 723,050 853,538 18%

MATERIALS & SUPPLIES Office Supplies 44100 321 600 400 -33% Paper 44110 185 175 150 -14% Postage 44120 551 550 550 0% Printing & Forms 44130 1,126 250 150 -40%

169 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

OUTSIDE PROPERTIES

Section 306

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE Herbicides 44221 450 0 0 0% Janitorial Supplies 44260 826 2,000 1,600 -20% Repair & Maint. Supplies 44300 1,733 3,000 1,500 -50% Machinery 44330 59 0 0 0% Locks & Hardware 44333 4,577 2,350 2,700 15% Office Small Equipment 44410 0 100 0 -100% Sign and Sign Maintenance 44430 49 700 400 -43%

TOTAL MATERIALS & SUPPLIES 9,878 9,725 7,450 -23%

ADMINISTRATIVE EXPENSE Meeting Expense 45150 43 0 0 0% Legal Ads 45340 0 150 150 0% Other Advertising & Promotion 45390 0 1,000 0 -100% Credit Card Fees 45500 11,407 12,450 22,328 79%

TOTAL ADMINISTRATIVE EXPENSES 11,450 13,600 22,478 65%

TOTAL EXPENSES BEFORE FIXED ASSETS 1,049,716 1,038,375 1,183,196 14%

FIXED ASSETS Fixed Asset Acquisition 48150 17,125 0 0 0%

TOTAL SECTION EXPENSES $1,066,841 $1,038,375 1,183,196 14%

170 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Executive Vice-President/Chief Operating Officer (COO)

Mission Statement: To support the mission of the RTAA and the goals and objectives of the Board of Trustees. The Executive Vice President/COO oversees the daily operations of the Reno-Tahoe International Airport (RNO) and the Reno-Stead Airport (RTS).

Key Duties and Responsibilities:

 Responsible for the safe and efficient operation of RNO and RTS.  Develop policies and plans for the operation and maintenance of both airports.  Provide airport information and community outreach through various forms of media and programs.  Maintain and enhance customer service and community outreach by hosting staff and community meetings.  In conjunction with the President/CEO, direct and manage staff in the development and implementation of work plans to achieve the Strategic Priorities and Guiding Principles established by the Board of Trustees.  Establish resource allocation to enhance each operating division’s ability to meet its mission and strategic initiatives.  Enhance service through customer service feedback programs.  Work with RTAA staff, airlines, tenants and community partners to create targeted customer service programs that help passengers have a positive travel experience, especially during peak travel times.

Executive Vice-President/COO - Initiatives:

FY 2016-17 Current Initiatives

1. Continue development of Unmanned Aircraft System (UAS) testing and training center at RTS through facilitation of NASA Task Order, Build #2.

Strategic Initiative / Guiding Principle: Facilitate Economic Development at Both Airports

Description: The objective of National Aeronautics and Space Administration (NASA) Task Order, Build #2 is to simulate air traffic to test NASA software in a live, virtual environment. This goal is to expand use of the RTS test range for the development of sense- and-avoid technologies. Through this initiative, RTAA staff will coordinate and assist the Nevada Institute of Autonomous Systems (NIAS), the official State of Nevada test site operator, the University of Nevada, Reno, and various contractors operating under this grant including testing by several UAS partners.

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Performance Measure: Successful completion of the statement of work outlined in the grant agreement including initial testing of the Live, Virtual, Constructive (LVC) connectivity and transmission of live flight data from UAS aircraft to NASA.

Progress: 100% Completed. NASA conducted full scale testing at RTS in both October 2016 and May 2017. Both exercises attracted national attention and included involvement by numerous private entities.

The May 2017 testing included over six (6) flying days, eighty (80) flights, and five (5) drone companies – Amazon Prime Air, Del Air Tech, Carbon Autonomous, and two Reno-based companies: Flirtey and Drone America. Not only did the test flights push data to the NASA traffic system, but also began flights Beyond Visual Line of Sight (BVLOS) of the pilot and conducted actual supply drops with parachutes. In addition to the flying companies, four (4) sensor companies tested electronic detect-and-avoid systems. The RTS staff provided day-to- day assistance to the participants helping to facilitate their testing successes.

The testing culminated with a first-ever press event on May 25, 2017, which was held in partnership with the NASA and NIAS. News media covered the debut event that included demonstrations of flight tests performed to blend drone traffic with the air traffic system utilized by manned aircraft, inside the actual Federal Aviation Administration (FAA) designated test site at RTS.

The October 2016 test involved five (5) drones that flew BVLOS of their operators while testing the planning, tracking and alerting capabilities of the NASA Unmanned Aircraft Systems (UAS) Traffic Management (UTM) platform. This was a critical step in developing technology and procedures for safe UAS air traffic management.

FY 2017-18 New Initiatives

1. Continue to develop UAS Research and Development Opportunities at RTS.

Strategic Initiative/Guiding Principle: Facilitate Economic Development at Both Airports /Financial Integrity

Description: Work with the Governor’s Office for Economic Development (GOED) and the Nevada Institute for Autonomous Systems (NIAS) to support contracts with NASA for UAS traffic management research and development at RTS and in Northern Nevada.

In addition, RTAA staff will continue to solicit and respond to other government and business requests to perform UAS testing at RTS including providing test range use information and site tours.

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Performance Measure: Meet all milestones in NASA/NIAS agreements and all requirements in association with the five year Cooperative Research and Development Agreement Grant.

173 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

EXECUTIVE VICE-PRESIDENT/COO

Section 251

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $210,370 $249,700 $260,600 4% Vacation Pay 41130 24,046 4,300 4,100 -5% Sick Leave 41140 12,814 12,000 10,800 -10% Holiday Pay 41150 13,229 0 0 0% Comp Time 41160 1,619 0 1,500 % Automobile Allowance 41250 4,616 4,800 4,800 0% Medicare 41320 4,251 4,000 4,200 5% Group Insurance 41340 17,842 19,600 22,400 14% Disability Insurance 41342 2,780 3,000 3,100 3% Vision Insurance 41344 290 400 400 0% Dental Insurance 41347 2,414 2,400 2,400 0% Workers Comp 41350 188 200 200 0% Retirement 41360 66,014 69,900 7,300 -90% Accrued PERS Expense 41365 3,307 0 0 0%

TOTAL PERSONNEL SERVICES 363,781 370,300 321,800 -13%

PURCHASED SERVICES Data Processing 43130 4,888 0 2,400 % Consultants - General 43140 2,093 5,000 2,600 -48% Office Equipment Rental 43210 2,730 2,700 2,700 0% Freight Expense 43430 161 50 50 0%

TOTAL PURCHASED SERVICES 9,871 7,750 7,750 0%

MATERIALS & SUPPLIES Office Supplies 44100 859 400 300 -25% Paper 44110 0 50 50 0% Postage 44120 8 50 50 0% Printing & Forms 44130 123 150 150 0% Medical Supplies 44270 212 150 150 0%

TOTAL MATERIALS & SUPPLIES 1,202 800 700 -13%

ADMINISTRATIVE EXPENSE Membership Dues 45110 1,245 1,245 1,125 -10% Conference Registration Fees 45130 3,180 4,400 4,480 2% Meeting Expense 45150 1,123 1,000 500 -50% Travel & Reimbursed Expense 45210 8,844 8,300 10,375 25% Other Advertising & Promotion 45390 175 0 0 0%

TOTAL ADMINISTRATIVE EXPENSES 14,567 14,945 16,480 10%

TOTAL DEPARTMENT EXPENSES $389,421 $393,795 $346,730 -12%

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Human Resources

Mission Statement: To provide strategic, innovative and responsive human resource services to the RTAA.

Key Duties and Responsibilities:

 Monitor federal and state legislative changes, incorporating any applicable changes into current policies and procedures.  Measure key organizational and Human Resource functions to provide meaningful and relevant data in support of organizational effectiveness.  Oversee the RTAA Culture Club which includes the following: (1) Events Committee; (2) Communication Committee; (3) Recognition Committee; (4) Values Committee and (5) Caring Campaign with the goal of enhancing and supporting a positive work environment.  Conduct research, compile data, perform statistical analyses and prepare comprehensive technical reports and summaries on various Human Resources related issues.  Provide excellent customer service to inquiries regarding job opportunities, the application and hiring process, requests for information and complaints.  Build and maintain a robust workforce planning program to avoid talent surpluses or shortages related to both labor demand and skills.  Develop and maintain a workforce plan to ensure an efficient employee/management team, maximize efficiencies and promote long-term success.  Incorporate use of ongoing succession planning program to develop a pool of identified successors for management and hard-to-fill positions.  Provide on-going support to further promote THRIVE values throughout the organization. The acronym of THRIVE stands for “Teamwork for Results”, “Honesty and Integrity”, “Respect and Recognition”, “Inspire and Innovate”, “Versatility”, and “Enthusiasm for Excellence”.  Plan and conduct employee recruitment and selection activities; confer with hiring divisions on job demands and appropriate requirements; develop job announcements, advertisements, supplemental applications and other recruitment materials; incorporate THRIVE values into hiring process.  Develop and administer job-related selection procedures and ensure that all phases of recruitment and selection comply with applicable federal, state and local laws, regulations and guidelines.  Assist in orienting new employees by providing programs regarding policies and developing guiding/supporting materials that offer a comprehensive organizational overview and incorporate THRIVE values.  Provide managers with a framework and training for on-boarding their new employees to include checklists, discussion guides and additional resources.

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 Conduct classification studies; prepare new or modified class specifications; recommend the classification of new or modified positions; conduct and participate in surveys and studies regarding compensation and benefits information.  Provide ongoing management training on the performance appraisal system. Support managerial efforts to review and update as necessary and support the completion of employee evaluations in a timely manner.  Provide training to ensure proper administration and supervisory oversight of current and new provisions of the collective bargaining agreements.  Insure that training offerings and opportunities operate in support of and maintain a close connection to the strategic plan and organizational values.  Meet with managers, supervisors and staff to conduct needs analyses, identify performance barriers and training gaps and provide appropriate solutions.  Within the framework of the Airport Authority University (AAU), plan, schedule, conduct and evaluate training programs and resources to all levels of the organization.  Administer the employee emergency communications call system.  Maintain the Human Resources Information System (HRIS).  Support the organization’s technology by offering continual training to increase end users’ skill and comfort levels.  Advise managers, supervisors and employees on a variety of employee and employee relations issues, including performance management, discipline and policy interpretation.  Consult with employees and their representatives and assist in the resolution of routine grievances, disputes and contract interpretation.  Coordinate labor contract negotiations, including development of management priorities, creation of bargaining proposals and facilitation of negotiation meetings.  Administer, communicate and assist employees on employee benefit programs. These programs include the following: (1) medical, dental, vision, life, and accidental death and dismemberment, (2) long-term disability insurance, (3) Public Employee Retirement System (PERS), (4) tuition reimbursement, (5) deferred compensation, (6) Health Savings Accounts (HAS)/flexible spending accounts, and (7) worker’s compensation.  Coordinate the employee wellness program to foster healthier employee lifestyle choices.  Administer programs such as employee recognition and incentive awards to increase engagement and support a more productive and satisfied workforce.  Expand on existing celebrations and communications of employee achievements in real time.  Coordinate exiting processes and conduct employee exit interviews.  Contribute to maintaining management turnover rate of no more than 7% due to bad attrition (i.e. voluntary separations for reasons other than retirement).  Coordinate quarterly town hall meetings so that information can be shared from management to front line staff and vice versa.

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Human Resources - Initiatives:

FY 2016-17 Current Initiatives

1. Maintain current levels of 20 hours annually on average for employee training.

Strategic Initiative / Guiding Principle: Provide a Positive Environment and Experience for All.

Description: Support employees in the attainment of an average of 20 training hours annually by continuing to enhance the Airport Authority University (AAU) through development of certificate programs and monitoring progress of successor’s developmental goals.

Performance Measure: Average of 20 hours annually of training attained by full time employees by June 30, 2017.

Progress: 100% Completed. An average of 61 hours of annual training per person was obtained in FY 2016-17. Employees logged over 15,884 training hours and 99.6% of RTAA employees exceeded the minimum training requirement of 20 hours.

2. Maintain management turnover rate of bad attrition at or below 7%.

Strategic Initiative / Guiding Principle: Provide a Positive Environment and Experience for All

Description: Bad attrition is voluntary separation where a solid performing employee leaves the organization for reasons not related to retirement or the betterment of the organization.

Performance Measure: Maintain a bad attrition turnover rate at or below 7% as of June 30, 2017.

Progress: 100% Achieved. The total percentage of bad attrition in FY 2016-17 was 1.9%.

3. On-going support of the THRIVE organizational values.

Strategic Initiative / Guiding Principle: Provide a Positive Environment and Experience for All

Description: Provide ongoing support to the continued evolution and embedding of the THRIVE values into the RTAA culture in order to increase employee engagement and satisfaction. The acronym of THRIVE stands for “Teamwork for Results”, Honesty and

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Integrity”, “Respect and Recognition”, “Inspire and Innovation”, “Versatility” and “Enthusiasm for Excellence”.

Performance Measure: Ensure that a minimum of 4 organizational values activities are conducted by June 30, 2017.

Progress: 100% Completed. During FY 2016-17, the RTAA held nineteen (19) activities including “You’ve Been Thrived” events in which eleven divisions were recognized with a theme party customized to reflect their unique contribution to the RTAA. In addition, six (6) employees were selected at the Annual Holiday Party for recognition corresponding to the letters of THRIVE. At the end of the fiscal year, new committee chairs and co-chairs have been selected with new projects created to maintain the momentum of the program.

4. Employees identified on a succession slate have performance goals related towards moving them to a “ready now” status.

Strategic Initiative/Guiding Principle: Provide a Positive Environment and Experience for All.

Description: Ensure employees identified on a succession slate have performance goals related towards moving them to a “ready now” status as indicated in their talent profile.

Performance Measure: At least 25% of employees on succession slates are rated as “ready now” by June 30, 2017.

Progress: As of June 30, 2017, 20% of succession slates were rated as “ready now”. Follow- up meetings have been held with members of the Senior Leadership (SLT) team to review progress on existing succession slates and follow up meetings are scheduled in early FY 2017-18 to update slates and see where any changes need to be made.

5. Conduct an employee satisfaction survey.

Strategic Initiative/Guiding Principle: Provide a Positive Environment and Experience for All.

Description: Conduct an employee satisfaction survey which will allow the organization to continue gathering feedback from employees on ways to maintain and improve the work environment at the RTAA.

Performance Measure: Employee participation in the survey of a least 75%.

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Progress: The employee satisfaction survey was completed in May 2017 with a response rate of 71%. While modestly below the target response rate, the feedback is currently being evaluated and a formal program to address areas of improvement is being developed with implementation in FY 2017-18.

6. Analyze and implement a Senior Leadership Development Program.

Strategic Initiative/Guiding Principle: Provide a Positive Environment and Experience for All.

Description: In the 2015 Employee Satisfaction Survey, employee feedback indicated focus areas that RTAA senior leadership could improve its management efforts. This initiative will conduct analysis of specific focus areas and develop specific training to promote improvement.

Performance Measure: Complete implementation of Senior Leadership Development Program by June 30, 2017.

Progress: 100% Completed. A follow-up survey was conducted with all members by an outside human resources consultant. As a result, the titles of certain Senior Leadership Team (SLT) members were modified, a change in the the format of the SLT meeting was achieved and focus areas were established for FY 2017-18 action.

FY 2017-18 New Initiatives

1. Maintain 20 hours per employee of training to include on-boarding and succession planning.

Strategic Initiative/Guiding Principle: Positive Environment: Organization/Staff Environment

Description: Support employees in the attainment of an average of 20 training hours by providing relevant, timely, up-to-date, and quality training opportunities with a focus on the Pillars of Learning: Safety/Security, Business Skills, Customer Service, Job/Career Development and Organizational.

Performance Measure: Average of 20 hours of training attained by full time employees by June 30, 2018.

2. Maintain Management turnover rate of bad attrition at or below 7% (excluding retirements).

179 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Strategic Initiative/Guiding Principle: Positive Environment: Organization/Staff Environment

Description: Ensure that the bad attrition turnover rate of all management employees stays at or below 7% for the fiscal year. Bad attrition is voluntary separations where a solid performing employee leaves the organization for reasons not related to retirement.

Performance Measure: Management bad attrition turnover rate of at or below 7% as of June 30, 2018.

3. Develop/implement action plans to improve employee satisfaction based on identified needs from the Employee Satisfaction survey.

Strategic Initiative/Guiding Principle: Positive Environment: Organization/Staff Environment

Description: Based on feedback from the Employee Satisfaction survey completed in the spring of 2017, identify improvement needs and develop and implement improvement action plans.

Performance Measure: Develop and Implement action plan to improve employee satisfaction by June 30, 2018.

4. Conduct Best Places to Work employee satisfaction survey.

Strategic Initiative/Guiding Principle: Positive Environment: Organization/Staff Environment

Description: Conduct an employee satisfaction survey which will allow the organization to continue gathering feedback from employees on ways to maintain and improve the work environment at the RTAA.

Performance Measure: Employee participation of a least 75%.

5. Provide on-going support of the THRIVE organizational values

Strategic Initiative/Guiding Principle: Positive Environment: Organization/Staff Environment

Description: Provide ongoing support to the continued evolution and embedding of the THRIVE values into the RTAA culture in order to increase employee engagement and satisfaction.

180 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Performance Measure: Ensure that a minimum of 4 organizational values activities are conducted by June 30, 2018.

181 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

HUMAN RESOURCES

Section 252

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $345,786 $403,000 $452,200 12% Vacation Pay 41130 29,293 3,900 2,600 -33% Sick Leave 41140 13,341 7,200 7,600 6% Holiday Pay 41150 20,535 0 0 0% Incentive Awards 41260 23,310 27,450 29,900 9% Service Awards 41270 4,394 4,280 6,810 59% Physical Exam Expense 41310 21,597 20,630 18,300 -11% Medicare 41320 5,816 5,800 6,600 14% Wellness Program 41330 2,060 3,650 3,650 0% Group Insurance 41340 31,286 34,500 52,700 53% PEBP Subsidy 41341 123,621 136,200 126,800 -7% Disability Insurance 41342 2,895 3,100 3,800 23% Vision Insurance 41344 435 500 700 40% Dental Insurance 41347 3,488 3,300 4,400 33% Section 125 Flex Plan 41349 10,107 10,000 6,500 -35% Workers Comp 41350 376 500 500 0% Retirement 41360 106,858 112,800 126,600 12% Accrued PERS Expense 41365 5,481 0 0% Unemployment 41370 19,060 30,000 30,000 0%

TOTAL PERSONNEL SERVICES 769,740 806,810 879,660 9%

PURCHASED SERVICES Other Professional Services 43190 22,366 19,450 15,350 -21% Office Equipment Rental 43210 4,675 5,150 6,378 24% Freight Expense 43430 114 200 200 0% Permits and Recorders Fees 43460 1,801 1,725 1,725 0% Other Purchased Services 43490 6,143 5,115 5,480 7%

TOTAL PURCHASED SERVICES 35,100 31,640 29,133 -8%

MATERIALS & SUPPLIES Office Supplies 44100 1,906 1,700 1,700 0% Paper 44110 328 425 425 0% Postage 44120 174 480 480 0% Printing & Forms 44130 0 900 800 -11%

TOTAL MATERIALS & SUPPLIES 2,409 3,505 3,405 -3%

ADMINISTRATIVE EXPENSE Membership Dues 45110 2,590 4,780 4,920 3% Books & Subscriptions 45120 366 250 318 27% Conference Registration Fees 45130 1,475 12,900 13,050 1% Training Expense 45140 225 11,355 1,000 -91% Organizational Training 45141 12,806 51,015 35,775 -30% Meeting Expense 45150 905 2,245 845 -62% Tuition Reimbrusement 45160 24,626 25,000 35,000 40% Accreditation Incentive Program 45180 0 1,500 1,500 0%

182 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

HUMAN RESOURCES

Section 252

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE Travel & Reimbursed Expense 45210 1,097 28,200 32,350 15% Interview Expense 45230 270 5,600 4,700 -16% Legal Ads 45340 900 2,000 2,000 0%

TOTAL ADMINISTRATIVE EXPENSES 45,261 144,845 131,458 -9%

TOTAL EXPENSES BEFORE FIXED ASSETS 852,509 986,800 1,043,656 6%

FIXED ASSETS Fixed Asset Acquisition 48150 0 0 9,650 %

TOTAL SECTION EXPENSES $852,509 $986,800 $1,053,306 7%

183 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Technology and Information Systems (TIS)

Mission Statement: To facilitate the implementation, proper use, security, and convenience of information technologies at the RTAA.

Key Duties and Responsibilities:

 Maintain and repair the following information technology areas:  Computer workstations and printers  Data communications network infrastructure  Application and database servers  System backup and security  Passenger information systems  Customs and Border Protection (CBP) kiosks  Policy and legal compliance  Implement the following new Technology and Information Systems:  Flight Information System (FIDS), digital overhead paging, and visual paging systems  Purchasing Card Industry (PCI) compliance technology  Emergency communications and security systems in the Airport Communications Center.  Intruder Protection and Detection Systems  RTAA Intranet using modern content management system  Interactive employee training system  Limit access to RTAA information technology resources to authorized users. This includes email, data storage areas, and Internet access.  Manage and maintain software and hardware for airport security system equipment.  Comply with Purchasing Card Industry (PCI) security and privacy standards, as well as Nevada Revised Statute (NRS) 597.970 Electronic Data Privacy requirements.  Implement and audit policies and procedures designed to further protect the RTAA’s systems and data.

Technology and Information Systems - Initiatives:

FY 2016-17 Current Initiatives

1. Develop and initiate an Information Systems Security Plan.

Strategic Initiative / Guiding Principle: Safety and Security.

184 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Description: RTAA employs several technologies that acquire, manipulate, and retain information that is both private and sensitive. Such information is subject to commercial requirements and NRS statutes. An Information Systems Security plan is required to ensure compliance.

Performance Measure: Prepare and initiate an Information Systems Security Plan before July 1, 2017.

Progress: 70% Completed. A draft Information Systems Security Plan has been created and reviewed internally. Subsequent to the review, additional elements from FIPS 200 (Federal Information Processing Standards Publication 200: Minimum Security Requirements for Federal Information and Information Systems) are being considered for inclusion. The modified draft will be presented to RTAA senior leadership in September 2017 for comment and possible adoption.

2. Redesign and implement the RTAA Intranet website using a modern content management system.

Strategic Initiative / Guiding Principle: Provide a Positive Environment and Experience for All.

Description: RTAA created and maintains an internal website with information of interest to employees. The original site was created in 2004 using Microsoft FrontPage, which is no longer supported. The site is not maintainable in its current form. It must be re-implemented using a contemporary and supported content management system.

Performance Measure: Website re-implemented by June 30, 2017.

Progress: 80% Completed. The developer has achieved substantial completion of the website design. RTAA staff is currently populating the site with content. The new Intranet will be rolled out to employees sometime in the fall of 2017.

3. Upgrade digital telephone system to Voice-over-IP (VoIP) technology.

Strategic Initiative / Guiding Principle: Safety and Security.

Description: Phase 2 of the phone system upgrade involves the replacement of all digital telephone sets with VoIP equivalents.

Performance Measure: Complete phase 2 of the phone system upgrade project prior to July 1, 2017.

185 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Progress: 100% Completed. The upgrade was substantially completed in November 2016 and IT has resolved any remaining issues.

4. Implement secure offsite (and out-of-state) data backup for all mission-critical systems.

Strategic Initiative/Guiding Principle: Safety and Security.

Description: In order to ensure organizational survivability, disaster recover, and financial ongoing concern, mission-critical data backups must be securely stored offsite and out-of- state.

Performance Measure: Implement offsite data backups prior to July 1, 2017.

Progress: 100% Completed. The offsite data backup system was completed in September 2016.

5. Replace security surveillance network video recorder (NVR).

Strategic Initiative/Guiding Principle: Safety and Security.

Description: RTAA stores continuous digital security surveillance video from 325 cameras on a network video recording device. This device is 8 years old and is well beyond manufacturers recommended life. In addition, the software will not support any cameras added going forward. This device must be replaced.

Performance Measure: Replace the security surveillance NVR prior to July 1, 2017.

Progress: 100% Completed. The NVR system was replaced in September 2016.

7. Implement Intrusion Prevention and Detection Technology.

Strategic Initiative/Guiding Principle: Financial Integrity

Description: In order to qualify for cyber security insurance, and to comply with Payment Card Industry (PCI) standards, RTAA must implement intrusion prevention and detection technology.

Performance Measure: Implement intrusion prevention and detection technology prior to July 1, 2017.

186 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Progress: 75% Completed. Intrusion Prevention technology has been implemented and the needs analysis for Intrusion Detection has been completed. Product selection and system implementation is anticipated in the fourth quarter of 2017.

8. Begin replacement of old, non-functioning Analog Cameras (Structural & Physical Threats)

Strategic Initiative/Guiding Principle: Safety and Security.

Description: This will ensure that we have adequate Closed Circuit Television (CCTV) coverage capabilities.

Performance Measure: Complete replacement program by June 30, 2017.

Progress: 85% Completed. Conduits and cabling have been installed. Cameras are on order and were installed in August 2017.

9. Begin installing cameras in locations without closed circuit television (CCTV) coverage.

Strategic Initiative/Guiding Principle: Safety and Security.

Description: This will ensure that locations with zero CCTV coverage are now visible.

Performance Measure: Complete replacement program by June 30, 2017.

Progress: 85% Completed. Conduits and cabling have been installed. Cameras are on order and were installed in August 2017.

FY 2017-18 New Initiatives

1. Continue the development of the Information Systems Security Plan.

Strategic Initiative / Guiding Principle: Safety and Security.

Description: RTAA employs several technologies that acquire, manipulate, and retain information that is both private and sensitive. Such information is subject to commercial requirements and NRS statutes. An Information Systems Security plan is required to ensure compliance.

Performance Measure: Complete and implement the Information Systems Security Plan before July 1, 2018.

187 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

2. Expand Video Surveillance Storage.

Strategic Initiative/Guiding Principle: Safety and Security

Description: Expand video surveillance storage system to accommodate new and replaced cameras.

Performance Measure: Expand video storage system by June 30, 2018.

3. Implement a rotation program for critical infrastructure hardware. Strategic Initiative/Guiding Principle: Financial Stability Description: Implement a rotation program to replace critical hardware systems every six (6) years. This initiative will provide for the timely and efficient replacement of outdated systems.

Performance Measure: Replace one-third of our critical infrastructure by June 30, 2018.

4. Replace Biometric Access Control Readers.

Strategic Initiative/Guiding Principle: Safety and Security

Description: Replace all biometric access control readers with available and secure equivalents. The current readers are approaching the end of their useful life and replacement units are no longer manufactured.

Performance Measure: Replace all readers by June 30, 2018.

5. Upgrade the Interactive Employee Training (IET) System.

Strategic Initiative/Guiding Principle: Safety and Security

Description: RTAA uses interactive computer-aided instruction technology to conduct mandatory SIDA security training. This technology will be unsupported in 18 months and should be replaced.

Performance Measure: Complete training system upgrade project by June 30, 2018.

188 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

TECHNOLOGY AND INFORMATION SYSTEMS

Section 253

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $514,414 $637,800 $670,700 5% Vacation Pay 41130 50,929 6,800 7,600 12% Sick Leave 41140 24,623 10,200 8,200 -20% Holiday Pay 41150 30,646 0 0 0% Workers Comp Pay 41170 0 0 700 % Overtime Pay 41210 2,658 4,000 0 -100% Overtime Call Back 41213 595 0 0 0% Shift Differential 41230 66 0 0 0% Medicare 41320 8,677 9,200 9,700 5% Group Insurance 41340 60,908 66,500 88,600 33% Disability Insurance 41342 5,469 6,100 6,600 8% Vision Insurance 41344 1,015 1,100 1,200 9% Dental Insurance 41347 7,422 6,500 7,400 14% Workers Comp 41350 1,785 2,500 700 -72% Retirement 41360 158,344 178,600 187,800 5% Accrued PERS Expense 41365 8,157 0 0 0%

TOTAL PERSONNEL SERVICES 875,708 929,300 989,200 6%

UTILITIES AND COMMUNICATIONS Communications 42210 291,279 300,000 303,280 1%

TOTAL UTILITIES & COMMUNICATIONS 291,279 300,000 303,280 1%

PURCHASED SERVICES Data Processing 43130 813,878 708,416 743,646 5% Other Professional Services 43190 2,925 0 0 0% Office Equipment Rental 43210 641 600 600 0% Contracted Services 43340 21,292 100,000 0 -100% Other Repair/Maintenance Svcs 43390 0 147,400 106,120 -28% Freight Expense 43430 957 1,000 1,000 0%

TOTAL PURCHASED SERVICES 839,693 957,416 851,366 -11%

MATERIALS & SUPPLIES Office Supplies 44100 40 500 500 0% Paper 44110 400 300 300 0% Postage 44120 7 100 100 0% Printing & Forms 44130 64 50 50 0% Lumber & Building Supplies 44370 115 0 0 0% Office Small Equipment 44410 43,237 12,000 49,035 309% Employee Safety Equipment 44450 0 100 0 -100% Telephone Equipment and Labor 44460 6,086 4,000 6,000 50%

TOTAL MATERIALS & SUPPLIES 49,949 17,050 55,985 228%

Books & Subscriptions 45120 332 1,000 880 -12% Conference Registration Fees 45130 0 800 795 -1% Training Expense 45140 0 5,800 0 -100% Meeting Expense 45150 274 250 250 0% Travel & Reimbursed Expense 45210 873 5,800 3,100 -47%

TOTAL ADMINISTRATIVE EXPENSES 1,480 13,650 5,025 -63%

189 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

TECHNOLOGY AND INFORMATION SYSTEMS

Section 253

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE TOTAL EXPENSES BEFORE FIXED ASSETS 2,058,110 2,217,416 2,204,856 -1%

FIXED ASSETS Fixed Asset Acquisition 48150 222,731 123,300 141,767 15%

TOTAL SECTION EXPENSES $2,280,841 $2,340,716 $2,346,623 0%

190 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Reno – Stead Airport

Mission Statement: A well-trained Reno-Stead Airport (RTS) staff will provide a safe, well- maintained, and efficiently run general aviation airport that provides superior customer service.

Key Duties and Responsibilities:  Maintain and preserve:  Airfield and roadway pavements and markings  Airfield lighting systems  RTS vehicle and equipment fleet  RTAA owned facilities  RTS landscapes  Unmanned Aircraft System (UAS) Range safety and operational support and management  Airport security fence and systems  Fire break system on 5,000 + acre facility to protect airport and neighbor property  Provide support for National Championship Air Races.  Support neighborhood relations by attendance at regularly scheduled Silver Knolls POA meetings, North Valleys Citizen Advisory Board and North Valleys Neighborhood Advisory Board meetings.  Represent the President/CEO on routine and emergency matters during non-business hours.  Ensure the safe, secure, and effective operations of RTS during non-business hours.  In cooperation with other RTAA departments; ensure leases, tenant information and safety inspections are managed in a timely, cooperative manner.  Work with Airport Economic Development to increase revenue opportunities at RTS including support and implementation of the new General Aviation Minimum Standards.  Provide required Occupational Safety Health Administration (OSHA) safety training.  Ensure RTS representation during planning and execution of construction activities.  Review and manage the Reno-Stead snow removal plan and operation.  Provide RTAA liaison for FAA approved safety programs and training opportunities at RTS.  Publish and train staff on the revised Airport Emergency Plan.  Provide outstanding customer service to staff, tenants, aviation users, and the public.  Provide logistical, operational and management support to UAS operations on and around RTS.

FY 2017-18 New Initiatives

1. Host and support an Experimental Aircraft Association (EAA) Young Eagles event at RTS.

Strategic Initiative/Guiding Principle: Optimize General Aviation Operations and Services and Provide a Positive Environment & Experience.

191 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Description: Founded in 1992, the Young Eagles program has dedicated nearly 25 years to giving youth ages 8–17 their first free ride in an . It’s the only program of its kind, with the sole mission to introduce and inspire kids in the world of aviation. Today, the Young Eagles program has flown over 2 million kids with the help of EAA’s network of volunteer pilots and ground volunteers.

This event will support and assist the local Northern Nevada chapter in its efforts to encourage interest in aviation in our community.

Performance Measure: Execute a successful event by June 30, 2018.

192 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

RENO STEAD AIRPORT

Section 254

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $370,121 $438,200 $457,200 4% Vacation Pay 41130 34,810 2,500 2,300 -8% Sick Leave 41140 6,385 7,200 6,500 -10% Holiday Pay 41150 21,034 2,100 2,100 0% Comp Time 41160 992 0 0 0% Workers Comp Pay 41170 638 0 0 0% Overtime Pay 41210 12,010 16,000 16,000 0% Overtime Call Back 41213 3,698 300 300 0% Standby 41220 1,284 600 1,200 100% Shift Differential 41230 1,832 2,200 2,200 0% Holiday worked Pay 41280 4,414 4,000 4,200 5% Medicare 41320 5,838 5,500 6,600 20% Group Insurance 41340 48,456 54,600 71,300 31% Disability Insurance 41342 3,489 3,900 4,100 5% Vision Insurance 41344 797 800 1,000 25% Dental Insurance 41347 6,528 5,100 6,100 20% Workers Comp 41350 7,800 11,000 11,200 2% Retirement 41360 119,548 122,200 127,800 5% Accrued PERS Expense 41365 6,026 0 0% Uniform Allowance 41380 3,519 2,500 2,500 0%

TOTAL PERSONNEL SERVICES 659,218 678,700 722,600 6%

UTILITIES AND COMMUNICATIONS Electricity 42110 55,802 62,000 61,000 -2% Natural Gas 42120 13,932 10,000 8,000 -20% Water 42130 11,792 14,500 17,110 18% Sewer 42140 20,349 18,500 24,500 32% Solid Waste Disposal 42150 5,102 6,000 6,400 7% Hazardous Waste Disposal 42180 100 500 600 20%

TOTAL UTILITIES & COMMUNICATIONS 107,076 111,500 117,610 5%

PURCHASED SERVICES Other Professional Services 43190 0 2,100 1,500 -29% Office Equipment Rental 43210 2,519 2,750 3,200 16% Equipment Rental 43211 0 1,000 1,000 0% Contracted Services 43340 26,619 35,610 36,410 2% Other Repair/Maintenance Svc 43390 30,343 12,000 10,000 -17% Freight Expense 43430 1,177 250 275 10% Permits & Recorders Fees 43460 1,806 2,440 2,550 5%

TOTAL PURCHASED SERVICES 62,464 56,150 54,935 -2%

MATERIALS & SUPPLIES Office Supplies 44100 2,210 1,200 1,450 21% Paper 44110 0 100 0 -100%

193 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

RENO STEAD AIRPORT

Section 254

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE Postage 44120 129 150 120 -20% Printing & Forms 44130 164 200 150 -25% Oil and Lubricants 44210 1,720 3,600 4,000 11% Herbicides 44221 10,937 12,500 12,500 0% Fertilizer 44222 1,022 250 150 -40% Auto Fuel 44230 5,991 6,500 5,500 -15% Diesel Fuel 44240 8,770 10,500 9,000 -14% Janitorial Supplies 44260 2,568 1,800 2,500 39% Medical Supplies 44270 263 250 600 140% Repair & Maintenance Supply 44300 8,455 5,000 5,000 0% Vehicles 44310 5,394 6,000 6,000 0% Heating & Air Conditioning 44320 0 1,000 475 -53% Machinery 44330 29,241 32,000 32,000 0% Locks & Hardware 44333 93 500 500 0% Seeds, Plants & Trees 44340 54 150 500 233% Plumbing Supplies 44350 1,218 800 600 -25% Electrical Supplies 44360 3,253 1,000 1,000 0% Runway/Taxiway 44361 2,974 2,000 2,000 0% Ramp Lighting 44362 1,887 2,000 2,000 0% Lumber & Building Supplies 44370 515 1,000 800 -20% Paint Supplies 44380 2,749 2,500 2,600 4% Small Tools - Minor Equipment 44400 5,934 4,000 4,000 0% Sign and Sign Maintenance 44430 199 600 1,000 67% Irrigation Supplies 44341 0 0 500 % Employee Safety Equipment 44450 1,335 1,000 1,200 20% Runways/taxiway Repair 44530 63,800 75,000 70,000 -7% Fence and Gate Repair Parts 44540 743 600 2,000 233%

TOTAL MATERIALS & SUPPLIES 161,618 172,200 168,145 -2%

ADMINISTRATIVE EXPENSE Membership Dues 45110 325 360 325 -10% Conference Registration Fees 45130 1,460 920 425 -54% Training Expense 45140 80 750 750 0% Meeting Expense 45150 451 0 0 0% Travel & Reimbursed Expense 45210 4,306 5,250 1,600 -70% Other Advertising & Promotion 45390 0 1,500 1,200 -20% Community Outreach 45398 548 0 0 0%

TOTAL ADMINISTRATIVE EXPENSES 7,170 8,780 4,300 -51%

TOTAL EXPENSES BEFORE FIXED ASSETS 997,546 1,027,330 1,067,590 4%

FIXED ASSETS Fixed Asset Acquisition 48150 26,000 71,050 105,659 49%

TOTAL SECTION EXPENSES $1,023,546 $1,098,380 $1,173,249 7%

194 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

UNMANNED AIRCRAFT SYSTEMS

Section 255

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $940 $0 $0 0% Temporary Employees 41120 0 6,300 6,300 0%

TOTAL PERSONNEL SERVICES 940 6,300 6,300 0%

PURCHASED SERVICES Equipment Rental 43211 0 26,600 26,600 0% Contracted Services 43340 4,862 195,300 195,300 0% Other Repair/Maintenance Svc 43390 19,634 0 0% Freight Expense 43430 112 0 0 0%

TOTAL PURCHASED SERVICES 24,608 221,900 221,900 0%

MATERIALS & SUPPLIES Office Supplies 44100 108 1,700 1,700 0% Repair & Maintenance Supply 44300 60 500 500 0% Electrical Supplies 44360 65 0 0 0% Office Small Equipment 44410 20,721 0 0 0%

TOTAL MATERIALS & SUPPLIES 20,954 2,200 2,200 0%

ADMINISTRATIVE EXPENSE Membership Dues 45110 2,200 1,100 1,100 0% Conference Registration Fees 45130 2,874 5,796 4,000 -31% Meeting Expense 45150 2,146 0 2,000 % Travel & Reimbursed Expense 45210 8,433 11,900 21,370 80% Other Advertising & Promotion 45390 7,402 15,000 0 -100% Conference Sponsorship 45391 6,270 5,000 0 -100% Community Outreach 45398 2,000 0 0 0%

TOTAL ADMINISTRATIVE EXPENSES 31,325 38,796 28,470 -27%

TOTAL SECTION EXPENSES $77,827 $269,196 $258,870 -4%

195 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Accounting

Mission Statement: Provide accurate and timely financial and statistical information; maintain a strong cash management system; maximize investment earnings; bill and collect all RTAA revenue; and provide timely paying of bills. This section is responsible for maintenance, reporting, and management of all accounting services in support of the RTAA’s financial goals and objectives.

Key Duties and Responsibilities:

 Prepare the Comprehensive Annual Financial Report (CAFR) including an introduction, management’s discussion and analysis, footnotes, statistical section, and compliance.  Process accounts payable biweekly including check issuance and wire transfer to ensure vendors are paid timely and accurately.  Process purchasing cards payments on a timely basis and review reporting online.  Prepare accounts receivable invoices twice monthly. Conduct monthly meetings to review outstanding accounts receivable and report to Senior Leadership all outstanding receivables over 60 days.  Complete Payrolls bi-weekly. Assure compliance with all Internal Revenue System (IRS) wage and reporting regulations.  Compile financial and statistical reports monthly and review for accuracy. Perform analytical reviews and reports for Senior Leadership.  Develop and issue monthly financial statements and management reports.  Record and track fixed assets including construction in progress and recognition of depreciation expenses.  Record and report all FAA Airport Improvement Program grants and Passenger Facility Charge revenue activity.  Administer Transportation Security Administration (TSA) grants associated with the canine explosive detection teams and coverage of the security checkpoints.  Account for Customer Facility Charge (CFC) revenue and expenditures associated with fees collection to maintain and repair rental car facilities.  Coordinate staff member work with independent auditors to compile the annual financial statements.  Invests all RTAA funds in accordance with the investment policy with a focus on safety, liquidity and yield.  Reconcile all bank balances and resolve outstanding issues.  Attend industry seminars and keep current on official pronouncements of accounting practice.  Participate and provide financial support to ad-hoc and standing RTAA committees, which may include employee relations and strategic planning.

196 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

 Obtain the Government Finance Officers Association (GFOA) Award of Certificate of Achievement for Excellence in Financial Reporting.  Complete and update annually the financial portion of the RTAA’s Fraud Risk Assessment.  Obtain and update annually the RTAA’s Conflict of Interest Statements.  Administer and manage RTAA debt pursuant to bond resolutions including principal and interest payments.

Accounting - Initiatives:

FY 2016-17 Current Initiatives

1. Obtain Investment Advisory Services.

Strategic Initiative/Guiding Principle: Financial Integrity.

Description: Currently staff manages RTAA’s Investment Portfolio of $46 million. Due to recent increases in interest rates and the improvement of the economy, the RTAA may benefit from an investment advisor. In addition to monitoring investment opportunities and making recommendations, an investment advisor will prepare quarterly investment reports and calculate the returns against a benchmark.

Performance Measure: Execute contract by June 30, 2017.

Progress: 100% Completed. A contract for investment advisory services was approved by Board of Trustees on June 8, 2017. The professional services contract has been executed and new services began on July 1, 2017.

197 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

ACCOUNTING AND ADMINISTRATION

Section 302

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $492,366 $591,700 $622,800 5% Vacation Pay 41130 46,180 7,800 8,400 8% Sick Leave 41140 33,403 14,300 12,200 -15% Holiday Pay 41150 31,566 0 0 0% Medicare 41320 8,637 8,600 9,000 5% Group Insurance 41340 59,681 70,400 70,700 0% Disability Insurance 41342 5,630 6,300 6,700 6% Vision Insurance 41344 870 1,100 1,000 -9% Dental Insurance 41347 6,439 7,100 6,100 -14% Workers Comp 41350 564 700 700 0% Retirement 41360 154,532 165,700 174,400 5% Accrued PERS Expense 41365 7,942 0 0 0%

TOTAL PERSONNEL SERVICES 847,808 873,700 912,000 4%

PURCHASED SERVICES Accounting and Auditing 43120 53,390 53,310 53,710 1% Data Processing 43130 147 0 0 0% Trustee & Paying Agent Fees 43180 9,083 8,500 5,000 -41% Other Professional Services 43190 14,167 18,500 56,000 203% Office Equipment Rental 43210 4,782 5,500 5,700 4% Freight Expense 43430 167 100 200 100% Other Purchased Services 43490 52,728 51,000 39,900 -22%

TOTAL PURCHASED SERVICES 134,463 136,910 160,510 17%

MATERIALS & SUPPLIES Office Supplies 44100 3,726 3,500 3,700 6% Paper 44110 464 650 700 8% Postage 44120 3,326 3,500 3,650 4% Printing & Forms 44130 516 1,000 1,000 0% Small Office Furniture 44415 0 0 1,000 %

TOTAL MATERIALS & SUPPLIES 8,032 8,650 10,050 16%

ADMINISTRATIVE EXPENSES Membership Dues 45110 1,119 1,350 1,520 13% Books & Subscriptions 45120 420 675 700 4% Conference Registration Fees 45130 0 1,670 2,070 24% Training Expense 45140 939 2,500 3,300 32% Meeting Expense 45150 0 400 400 0% Travel & Reimbursed Expense 45210 0 3,750 7,725 106%

TOTAL ADMINISTRATIVE EXPENSES 2,478 10,345 15,715 52%

TOTAL SECTION EXPENSES $992,781 $1,029,605 $1,098,275 7%

198 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Purchasing and Materials Management

Mission Statement: To ensure that all materials, supplies, equipment, and services required to operate Reno-Tahoe International Airport (RNO) and Reno Stead Airport (RTS) are acquired in a timely manner, at the lowest possible cost, consistent with the quality required, and in compliance with all applicable procurement legislation.

Key Duties and Responsibilities:

 Purchase materials, supplies, equipment and services needed for day-to-day operation in a timely, cost effective manner in compliance with applicable laws.  Comply with the requirements for competitive bidding contained in NRS 332 and 338 and the Airport Improvement Project Handbook by preparing bids and proposal requests.  Inventory stored property and assist Departments/Divisions in identifying property for continued storage, addition to stock, or disposal.  Review items in warehouse inventory to establish appropriate items and stock levels.  Conduct bi-annual inventory of RTAA fixed assets, as statutorily mandated, utilizing barcoding equipment.  Continue monitoring usage of and updates to the procurement card system and its interface with the RTAA’s accounting system.  Receive and issue materials and supplies for work order-based purchases.  Order and receive stock inventory to support RTAA maintenance and operation.  Maintain and operate storeroom, stock locations and bins on a daily on-going basis.  Prepare and dispose of surplus property in bi-annual public auctions in accordance with statutory requirements.  Evaluate Purchasing and Materials Management processes and procedures with a focus on continual improvement.  Cross train employees on customizing Professional Service Agreements and managing Request for Proposal processes.  Coordinate and administer the RTAA’s use of the Nevada Government eMarketplace (NGEM) procurement system including issuing new solicitations and encouraging vendor registration.  Coordinate and administer the RTAA’s use of the Contracts Management database in the NGEM system to update current and input new contracts.  Administer succession planning for Purchasing and Material Management positions.  Serve as the Resource Group Leader/ Logistics Section Chief in RTAA emergency situations. This includes acquisition and delivery of supplies, food and other support to responders.

199 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Purchasing and Materials Management - Initiatives:

FY 2016-17 Current Initiatives

1. Implement Warehouse Automation Upgrade

Strategic Initiative/Guiding Principle: Financial Integrity.

Description: The Warehouse Automation module for Sage 500 will provide a solution to streamline order distribution/ receiving and inventory counts. Through use of bar code system for inventory items, this system will make data input into the accounting system more timely and more accurate through use of handheld devices.

Performance Measure: 100% implementation of the system by June 30, 2017.

Progress: 85% Completed. The software has been purchased and system configuration has begun by the system provider and site installation was completed in July 2017. In addition, a Wi-Fi system has been installed in the warehouse by the TIS division to enable communication between the hand-held devices and the inventory accounting system.

While missing the established deadline, various improvements to warehouse processes and gained efficiencies will be a direct benefit of this project.

200 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

PURCHASING AND MATERIALS MANAGEMENT

Section 303

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $266,860 $336,100 $426,700 27% Vacation Pay 41130 28,314 4,800 4,700 -2% Sick Leave 41140 28,390 7,300 5,200 -29% Holiday Pay 41150 16,647 0 0 0% Overtime Pay 41210 0 500 500 0% Medicare 41320 2,601 2,600 3,800 46% Group Insurance 41340 38,505 41,900 61,000 46% Disability Insurance 41342 3,160 3,500 4,400 26% Vision Insurance 41344 435 600 700 17% Dental Insurance 41347 3,398 3,500 4,400 26% Workers Comp 41350 2,819 4,000 4,100 3% Retirement 41360 88,862 93,800 119,200 27% Accrued PERS Expense 41365 4,559 0 0 0% Uniform Allowance 41380 190 750 750 0%

TOTAL PERSONNEL SERVICES 484,740 499,350 635,450 27%

PURCHASED SERVICES Other Professional Services 43190 0 0 1,500 % Office Equipment Rental 43210 3,937 3,600 4,500 25% Contracted Services 43340 437 500 500 0% Other Repair/Maintenance Svcs 43390 0 500 500 0% Freight Expense 43430 1,902 2,600 2,300 -12% Permits & Recorders Fees 43460 70 150 150 0%

TOTAL PURCHASED SERVICES 6,345 7,350 9,450 29%

MATERIALS & SUPPLIES Office Supplies 44100 1,545 2,500 2,000 -20% Paper 44110 200 250 250 0% Postage 44120 3 100 100 0% Printing & Forms 44130 178 400 400 0% Medical Supplies 44270 28 350 400 14% Other Operating Supplies 44290 439 450 450 0% Vehicles 44310 289 0 0 0% Machinery 44330 0 200 200 0% Small Tools - Minor Equipment 44400 835 1,000 800 -20% Office Small Equipment 44410 101 500 500 0% Employee Safety Equipment 44450 1,037 600 600 0% Purchase Price Variance 44750 (88) 0 0 0%

TOTAL MATERIALS & SUPPLIES 4,569 6,350 5,700 -10%

ADMINISTRATIVE EXPENSES Membership Dues 45110 1,125 1,470 1,530 4% Books & Subscriptions 45120 0 450 -100% Conference Registration Fees 45130 700 500 500 0% Training Expense 45140 0 500 500 0% Travel & Reimbursed Expense 45210 432 2,000 2,000 0%

201 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

PURCHASING AND MATERIALS MANAGEMENT

Section 303

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE Legal Advertisements 45340 1,559 3,100 3,100 0%

TOTAL ADMINISTRATIVE EXPENSES 3,815 8,020 7,630 -5%

TOTAL EXPENSES BEFORE FIXED ASSETS 499,470 521,070 658,230 26%

FIXED ASSETS Fixed Asset Acquisition 48150 46,178 21,000 0 -100%

TOTAL SECTION EXPENSES $545,648 $542,070 $658,230 21%

202 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Finance and Budgeting

Mission Statement: To provide financial analysis and budgeting services with a focus on effective resource utilization, asset protection, long-term strategic planning, and financial stability. This department is responsible for (1) budgeting and forecasting revenue and expense outcomes, (2) calculating airline rates, fees, and charges, (3) funding capital improvement project needs, and (4) providing risk management services through coordination with insurance brokers and securing insurance coverage at reasonable costs.

Key Duties and Responsibilities:

 Coordinate the RTAA’s annual operating budget including the forecast of revenues to assist in the establishment of expenditure targets.  Obtain the Governmental Finance Officer Association “Distinguished Budget Presentation” award.  Prepare the monthly financial package at the Finance and Business Development Committee meetings.  Calculate airline rates and charges and perform the mid-year review and year end settlement analysis.  Provide cost estimates to airlines considering air service to the Reno-Tahoe International Airport.  Prepare financial feasibility analysis to evaluate the ability of the RTAA to afford future capital improvement programs and maintain prudent cash and liquidity reserves.  Update and maintain the extensive financial models used to prepare the annual budget, calculate airline rates and charges, and forecast financial results under various scenarios.  Administer the Passenger Facility Charge (PFC) program including development of new applications and quarterly reporting.  Review Board memo fiscal impacts, and other analyses as requested.  Complete insurance applications, provide insurance company tours, administer RTAA liability claims, and review RTAA contract insurance requirements.  Perform analytical reviews and reports for Senior Leadership.  Each staff member, in conjunction with Accounting, will work with independent auditors to compile the annual financial statements  Set training goals and encourage all staff to take advantage of all appropriate RTAA in-house training opportunities  Attend industry seminars and keep current on financial and accounting “best practices”.  Continue to aggressively apply for federal grants and maximize use of PFC fees to fund capital improvement projects

203 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Finance and Budgeting - Initiatives:

FY 2016-17 Current Initiatives

1. Perform a Cost/Benefit Analysis of budget preparation software.

Strategic Initiative/Guiding Principle: Financial Integrity.

Description: The RTAA currently develops departmental/division annual budgets and performs consolidation using Microsoft Excel. While flexible, use of Excel requires significant annual setup and inherently is more prone to consolidation calculation errors. Also standalone budget systems may be more user friendly for preparation of department/ division budgets.

Performance Measure: Complete cost/benefit analysis by January 31, 2017.

Progress: 100% Completed. Staff contacted six (6) software providers and received full software demonstrations on three (3) products. Upon review, staff determined all the products were currently priced at a cost greater than the estimated benefits to the RTAA.

Staff may consider budget preparation software in the future if discounted pricing is available and/or the organization undergoes significant changes.

FY 2017-18 New Initiatives

1. Oversee the Financial Feasibility Analysis to be completed as a part of the RNO Master Plan.

Strategic Initiative/Guiding Principle: Financial Integrity

Description: This component of the Master Plan answers the questions: (1) How will the RTAA pay for proposed improvements; and (2) What are the affordability and the financial impacts on airlines serving RNO. This analysis is to be completed to evaluate the financial impact and feasibility of proposed capital projects. This task will assist, review, evaluate and confirm the recommendations of the consultant.

Performance Measure Update: Completion of the Financial Feasibility Analysis by June 30, 2018.

204 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

FINANCE AND BUDGETING

Section 305

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $163,619 $204,300 $215,700 6% Vacation Pay 41130 17,665 2,800 3,600 29% Sick Leave 41140 14,795 4,700 3,200 -32% Holiday Pay 41150 11,573 0 0 0% Medicare 41320 2,948 3,000 3,100 3% Group Insurance 41340 16,479 18,900 21,400 13% Disability Insurance 41342 1,962 2,100 2,300 10% Vision Insurance 41344 290 300 300 0% Dental Insurance 41347 2,504 2,100 2,100 0% Workers Comp 41350 188 200 200 0% Retirement 41360 54,010 57,200 60,400 6% Accrued PERS Expense 41365 2,707 0 0 0%

TOTAL PERSONNEL SERVICES 288,740 295,600 312,300 6%

PURCHASED SERVICES Data Processing 43130 8,582 0 0 0% Consultants - General 43140 5,000 25,000 5,000 -80% Office Equipment Rental 43210 892 1,000 1,000 0% Freight Expense 43430 90 100 100 0%

TOTAL PURCHASED SERVICES 14,564 26,100 6,100 -77%

MATERIALS & SUPPLIES Office Supplies 44100 515 400 400 0% Paper 44110 64 50 50 0% Postage 44120 132 200 200 0% Printing & Forms 44130 191 0 0 0% Office Small Equipment 44410 755 0 0 0%

TOTAL MATERIALS & SUPPLIES 1,656 650 650 0%

ADMINISTRATIVE EXPENSE Membership Dues 45110 1,984 1,700 1,700 0% Books & Subscriptions 45120 348 350 350 0% Conference Registration Fees 45130 1,160 1,000 1,000 0% Training Expense 45140 191 300 300 0% Travel & Reimbursed Expense 45210 1,440 3,700 3,700 0% Legal Ads 45340 101 450 450 0%

TOTAL ADMINISTRATIVE EXPENSES 5,224 7,500 7,500 0%

TOTAL SECTION EXPENSES $310,183 $329,850 $326,550 -1%

205 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

NONDEPARTMENTAL

Section 900

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 178,115 $210,750 $240,000 14% Temporary Employees 41120 0 (350,000) (450,000) 0% PEBP Subsidy 41341 (18,308) 0 0 0% Self Funded Rx 41343 (252) 0 0 0% Vision Service Plan 41344 (252) 0 0 0% Dental Insurance 41347 (252) 0 0 0% Pension Expense 41361 (987,387) 0 0 0%

TOTAL PERSONNEL SERVICES (828,336) (139,250) (210,000) 0%

PURCHASED SERVICES Other Professional Services 43190 51,169 30,000 30,000 0% Air Service Studies 43193 32,026 50,000 100,000 100% Contracted Services 43340 101,970 104,975 200,000 91% Freight Expense 43430 386 0 300 %

TOTAL PURCHASED SERVICES 185,550 184,975 330,300 79%

MATERIALS & SUPPLIES Office Supplies 44100 (50) 0 0 0% Paper 44110 1,643 0 1,500 % Inventory Adjustments 44292 2,208 0 0 0%

TOTAL MATERIALS & SUPPLIES 3,801 0 1,500 %

ADMINISTRATIVE EXPENSE Air Service Development 45350 204,507 204,800 172,500 -16% Miscellaneous Expense 45370 (1,270) 0 0 0% Other Advertising & Promotion 45390 50,000 50,000 50,000 0% Airport Liability 45410 94,500 96,400 97,300 1% Vehicle Liability 45420 48,331 49,300 37,400 -24% Bonds Employees/Officers 45440 10,714 9,500 9,700 2% Buildings & Contents 45450 665,887 705,000 669,700 -5% Public Officials Liability 45460 70,025 71,400 71,500 0% Public Safety Liability 45470 65,368 66,700 60,100 -10% Other Insurance 45490 14,500 25,000 25,000 0% Fines and Settleents 45920 100,500 0 0 0%

TOTAL ADMINISTRATIVE EXPENSES 1,323,061 1,278,100 1,193,200 -7%

FIXED CHARGES Int Exp 2015 Bonds 71125 428,312 534,462 487,300 -9% Int Exp 2005 Bonds 71130 258,224 0 0 0% Int Exp 2011A Subordinate Note 71150 144,925 73,425 0 -100% Int Exp 2011B Subordinate Note 71160 15,129 7,565 0 -100%

TOTAL FIXED CHARGES 846,590 615,452 487,300 -21%

TOTAL SECTION EXPENSES $1,530,666 $1,939,277 $1,802,300 -7%

206 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Vice President of Operations and Public Safety

Mission Statement: Ensure leadership and direction in managing, coordinating and integrating all aspects of airfield rescue and firefighting (ARFF), airside, landside, police, security and terminal operations in compliance with regulations for an efficient, safe and seamless experience for all Airport users.

Key Duties and Responsibilities:

 Provide direction and support to ARFF, Airside Operations and Communications, Landside, Police, and Security divisions.  Ensure airport is continually in compliance with 14 CFR 139 Certification of Airports and 14 CFR 1542 Airport Security.  Successfully complete a Part 1542 annual security exercise.  Successfully complete required Part 139 annual mass casualty emergency and table-top exercises.  Represent the President/CEO on routine and emergency matters during non-business hours.  Ensure the safe, secure, and effective operation of the airport during non-business hours.  Sustain and enhance parking and ground transportation net revenues.  Provide indications and warnings to RTAA staff and tenants about situations that may negatively impact safe, secure, efficient airport operations.  Sustain decision-grade information/situation reporting and expand emergency response capabilities.  Ensure operational readiness of the Airfield Rescue and Firefighting (ARFF) division including disaster and emergency training as required by the FAA.  Ensure operational readiness of the RNO Police department including participation in the Transportation Security Administration (TSA) National Explosive Detection Canine Team Program.  Maintain Police affiliation and certification with the Commission on Accreditation for Law Enforcement (CALEA).  Manage Emergency Operations Center (EOC) during emergencies. Activate EOC as required and provide National Incident Management System (NIMS) training to staff.  Conduct security and disaster training (Airside Operations, ARFF, Police and Safety) as required by the Federal Aviation Administration (FAA).  Provide required Occupational Safety Health Administration (OSHA) safety training.  Ensure Operations representation during planning and execution of construction activities.  Review snow season activities and manage the update of Snow and Ice Control Plan including coordination of pre-season meetings.  Posture RTAA Operations staff for FAA proposed Safety Management System implementation.

207 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

 Publish and train staff on the revised Airport Emergency Plan.  Effectively orient and train new organizational leaders on department missions, constraints, restrictions, and opportunities.  Provide outstanding customer service to staff, tenants, aviation users, and the public from parking to the runways and back again.

Vice President of Operations and Public Safety – Initiatives:

FY 2016-17 Current Initiatives

1. Pass FAA 139 Inspection.

Strategic Initiative / Guiding Principle: Safety and Security.

Description: Public safety and security is always the top priority of the RTAA. The FAA issues operating certificates to airports to ensure safety in air transportation. To obtain a certificate, an airport must agree to certain operational and safety standards and provide for such things as firefighting and rescue equipment.

Performance Measure: Pass the Part 139 Annual Airport Certification Inspection with no more than ten (10) discrepancies noted by the FAA.

Progress: 100% completed. The RTAA passed the inspection with only two (2) discrepancies identified by the FAA.

2. Conduct an FAA Part 139 Triennial Mass Casualty Full-Scale Disaster exercise.

Strategic Initiative/Guiding Principle: Safety and Security.

Description: FAA Part 139, Certification of Airports requires these annual events to maintain a Commercial Operating Certificate for RNO.

Performance Measure: Complete and receive verification of acceptance of the exercise by the FAA Certification Inspector by June 30, 2017. The exercise should involve twenty-five (25) mutual aid organizations.

Progress: 100% Completed. On April 27, 2017, staff conducted the mass casualty exercise as required by the FAA. The primary purpose of the exercise is to provide readiness and situational training for Airport first responders in the event of a mass casualty incident.

208 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

In preparation for the exercise, staff began planning for the Triennial six months in advance by establishing a mass casualty scenario and then reaching out to, and holding numerous planning meetings with community agencies and first responders who would be participating. This year, fifty-three (53) agencies participated in the exercise.

The scenario involved an explosion on an international arriving aircraft, which injured passengers both on and off the aircraft. As a critical part of the exercise, over 100 volunteers from the community participated as passenger “actors” who were asked to play a critical role as victims of the aircraft incident. Because the cause of the explosion was not known, the response fell under joint command between law enforcement and the fire division.

The drill was covered by multiple television, radio and print news outlets. In addition, the news media participated in a mock news conference to drill the Airport on disseminating disaster information. While the emergency response took place on the airfield, a new emergency customer service team engaged with family members in the terminal to help direct loved ones to the Friends and Relatives Center (FRC).

3. Pass TSA 1542 Inspections.

Strategic Initiative / Guiding Principle: Safety and Security.

Description: The RTAA is not allowed to operate RNO unless it adopts and carries out a security program as approved by the TSA. The Part 1542 Airport Security Inspection process is to ensure the RTAA provides for the safety and security of persons and property on an aircraft against an act of criminal violence, aircraft piracy, and/or the introduction of an unauthorized , explosive, or incendiary device onto an aircraft.

Performance Measure: Pass the Part 1542 Airport Security Inspection with no more than ten (10) discrepancies noted by the TSA.

Progress: 100% Completed. An inspection by the TSA was completed in May 2017. The RTAA passed the inspection with no discrepancies identified.

4. Conduct an TSA 1542 Security exercise

Strategic Initiative/Guiding Principle: Safety and Security.

Description: TSA Part 1542 requires these annual events to maintain compliance at a commercial service airport.

209 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Performance Measure: Complete and receive verification of the acceptance of the exercise by the TSA Reno Assistant Federal Security Director by June 30, 2017.

Progress: 100% Completed. The annual exercise was held on October 26, 2016 with seventeen (17) organizations participating including the FBI, TSA, FAA, airlines and a host of RNO tenants. The exercise was accepted by the TSA Reno Assistant Federal Security Director.

5. Publish General Aviation (GA) newsletters to share information and enhance communications with RNO GA tenants.

Strategic Initiative / Guiding Principle: Optimize General Aviation Operations and Services.

Description: Plan, write and distribute GA newsletters to the tenant base.

Performance Measure: Publish four (4) GA quarterly issues by June 30, 2017.

Progress: 100% Completed. The RTAA published four (4) GA newsletters by June 30, 2017.

FY 2017-18 New Initiatives

1. Pass FAA 139 Inspection.

Strategic Initiative / Guiding Principle: Safety and Security.

Description: Public safety and security is always the top priority of the RTAA. The FAA issues operating certificates to airports to ensure safety in air transportation. To obtain a certificate, an airport must agree to certain operational and safety standards and provide for such things as firefighting and rescue equipment.

Performance Measure: Pass the Part 139 Annual Airport Certification Inspection with no more than ten (10) discrepancies noted by the FAA.

2. Conduct an FAA Part 139 Table Top Disaster exercise.

Strategic Initiative/Guiding Principle: Safety and Security.

Description: FAA Part 139, Certification of Airports requires this annual event to maintain a Commercial Operating Certificate for RNO.

210 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Performance Measure: Complete and receive verification of acceptance of the exercise by the FAA Certification Inspector by June 30, 2018.

3. Pass TSA 1542 Inspections.

Strategic Initiative / Guiding Principle: Safety and Security.

Description: The RTAA is not allowed to operate RNO unless it adopts and carries out a security program as approved by the TSA. The Part 1542 Airport Security Inspection process is to ensure the RTAA provides for the safety and security of persons and property on an aircraft against an act of criminal violence, aircraft piracy, and/or the introduction of an unauthorized weapon, explosive, or incendiary device onto an aircraft.

Performance Measure: Pass the Part 1542 Airport Security Inspection with no more than ten (10) discrepancies noted by the TSA.

4. Conduct a TSA 1542 Security exercise.

Strategic Initiative/Guiding Principle: Safety and Security.

Description: TSA Part 1542 requires these annual events to maintain compliance at a commercial service airport.

Performance Measure: Complete and receive verification of the acceptance of the exercise by the TSA Reno Assistant Federal Security Director by June 30, 2018.

5. Publish General Aviation (GA) newsletters to share information and enhance communications with RNO GA tenants.

Strategic Initiative / Guiding Principle: Optimize General Aviation Operations and Services.

Description: Plan, write and distribute GA newsletters to the tenant base.

Performance Measure: Publish four (4) GA quarterly issues by June 30, 2018.

211 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

VICE-PRESIDENT OF OPERATIONS AND PUBLIC SAFETY

Section 401

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $186,405 $218,600 $235,100 8% Vacation Pay 41130 17,805 800 2,700 238% Sick Leave 41140 5,789 4,400 4,700 7% Holiday Pay 41150 10,421 0 0 0% Overtime Pay 41210 127 0 0 0% Medicare 41320 3,142 3,200 3,400 6% Group Insurance 41340 19,788 26,000 29,600 14% Disability Insurance 41342 2,216 2,500 2,700 8% Vision Insurance 41344 217 400 400 0% Dental Insurance 41347 1,431 2,400 2,400 0% Workers Comp 41350 1,316 2,200 2,200 0% Retirement 41360 57,728 61,200 65,800 8% Accrued PERS Expense 41365 2,896 0 0 0%

TOTAL PERSONNEL SERVICES 309,281 321,700 349,000 8%

PURCHASED SERVICES Office Equipment Rental 43210 1,886 2,200 2,200 0% Equipment Rental 43211 0 0 0%

TOTAL PURCHASED SERVICES 1,886 2,200 2,200 0%

MATERIALS & SUPPLIES Office Supplies 44100 50 350 250 -29% Paper 44110 0 200 200 0% Postage 44120 0 20 20 0% Printing & Forms 44130 76 0 0 0%

TOTAL MATERIALS & SUPPLIES 126 570 470 -18%

ADMINISTRATIVE EXPENSE Membership Dues 45110 275 375 275 -27% Conference Registration Fees 45130 0 700 700 0% Training Expense 45140 4,767 6,000 6,000 0% Meeting Expense 45150 165 100 1,400 1300% Disaster Exercise Expense 45170 0 18,000 0 -100% Travel & Reimbursed Expense 45210 1,307 2,700 2,500 -7%

TOTAL ADMINISTRATIVE EXPENSES 6,514 27,875 10,875 -61%

TOTAL DEPARTMENT EXPENSES $317,807 $352,345 $362,545 3%

212 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Airside Operations and Communications

Mission Statement: Ensure a safe and efficient means of integrated transportation for the public within the Reno-Tahoe Airport Authority (RTAA) system; ensure compliance with 14 CFR Part 139 of the Federal Aviation Regulations; provide effective communications support to staff, tenants, customers, and supporting entities; prepare to act decisively to protect life and property by organizing appropriate responses to public safety and emergency events.

Key Duties and Responsibilities:

 Ensure RNO is continually in compliance with 14 CFR 139 FAA Certification of Airports and the annual FAA Certification Inspection is passed.  Represent the President/CEO on routine and emergency matters during non-business hours to ensure continuing operation.  Successfully complete Airside Operations duties as part of the Federal Aviation Administration (FAA) required annual table-top and triennial exercises.  Mitigate the risk of bird strikes and animal strikes in accordance with the Wildlife Hazard Mitigation Plan (WHMP).  Develop and administer airfield driving regulations and airport rules and regulations.  Conduct training on Safety Management System (SMS) and Operational Risk Management. Assess and mitigate hazards.  Manage Emergency Operations Center (EOC) during emergencies.  Provide staff and tenant training on the revised Airport Emergency Plan (AEP).  Effectively manage ramp space to meet air carrier, cargo, general aviation, and Customs/ operations.  Ensure all team members are capable of managing communications for the first 45 minutes of an Alert III response and capable of operating communications in the Mobile Command Vehicle.  Dispatch all routine and emergency calls for ARFF, maintenance, police, operations, and security.  Prepare and perform Snow Desk duties and update the Snow and Ice Control Plan.  Activate emergency alert notifications, recall essential personnel, and open the Emergency Operations Center (EOC).  Administer and provide user training on the Authority’s 800 MHz radio system and participation in the Washoe County Radio Communications System Joint Operating Committee.  Monitor door alarms and access control points, verify badge access and print access point reports upon request; dispatch police and/or security to access control point violations.  Operate airport telephone paging system, answer questions from the public, direct operational phone inquiries, and operate direct phone lines with the FAA Tower and Airport Fire and Rescue division.  Monitor Fire Alarm System for the terminal building, parking structures, U.S. Customs building and airfield maintenance.

213 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

 Monitor and operate the National Crime Information Center computer for incoming information from outside police agencies and for the Department of bulletins.  Maintain software and hardware for communications.  Coordinate Airport Communications rehabilitation project efforts.  Coordinate new handheld, vehicle and workstation console radio equipment and accessories.  Maintain Commission on Accreditation for Law Enforcement (CALEA) accreditation.

FY 2016-17 Current Initiatives

1. Track and implement the FAA’s Safety Management Systems (SMS) program.

Strategic Initiative/Guiding Principle: Safety and Security.

Description: SMS is the formal, top-down, organization-wide approach to managing safety risk and assuring the effectiveness of safety risk controls. It includes systematic procedures, practices, and policies for the management of safety risk. This effort will require the RTAA to modernize equipment and transparently adapt to regulatory changes in order to meet FAA and/or TSA performance and reporting standards in regulations/Advisory Circulars.

Performance Measure: Monitoring FAA SMS rule-making process and, with the likely issuance of an Advisory Circular by the FAA in 2016, complete 60% of SMS implementation by June 30, 2017.

Progress: 100% Completed. Staff continues to monitor SMS rule-making. As of June 30, 2017, the FAA has not issued an Advisory Circular and no additional action is anticipated until a formal SMS document is issued.

FY 2017-18 New Initiatives

1. Conduct a Wildlife Hazard Assessment.

Strategic Initiative/Guiding Principle: Safety and Security.

Description: The assessment provides wildlife management recommendations to minimize wildlife hazards to aircraft operations at RNO.

Performance Measure: Complete and submit assessment to the FAA by June 30, 2018.

214 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

AIRSIDE OPERATIONS

Section 402

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $980,697 $1,197,500 $1,340,400 12% Temporary Employees 41120 5,465 0 0 0% Vacation Pay 41130 95,865 10,100 6,700 -34% Sick Leave 41140 65,311 22,500 13,700 -39% Holiday Pay 41150 61,422 10,000 10,500 5% Comp time 41160 1,179 0 0 0% Overtime Pay 41210 63,226 30,000 15,000 -50% Overtime Call Back 41213 4,661 7,500 6,000 -20% Standby 41220 52 0 0 0% Shift Differential 41230 12,050 16,000 16,000 0% Holiday worked Pay 41280 19,029 20,000 21,000 5% Medicare 41320 18,456 17,300 19,400 12% FICA 41321 872 0 0 0% Group Insurance 41340 139,441 171,100 224,200 31% Disability Insurance 41342 10,892 12,500 13,900 11% Vision Insurance 41344 1,957 2,800 3,000 7% Dental Insurance 41347 15,024 17,200 19,100 11% Workers Comp 41350 11,089 15,900 16,100 1% Retirement 41360 313,618 333,900 375,300 12% Accrued PERS Expense 41365 15,901 0 0 0% Uniform Allowance 41380 1,756 2,500 2,500 0%

TOTAL PERSONNEL SERVICES 1,837,962 1,886,800 2,102,800 11%

PURCHASED SERVICES Other Professional Services 43190 33,156 43,221 120,445 179% Office Equipment Rental 43210 1,921 2,400 2,400 0% Other Repair/Maintenance Svcs 43390 65,052 90,940 85,677 -6% Freight Expense 43430 171 400 400 0%

TOTAL PURCHASED SERVICES 100,301 136,961 208,922 53%

MATERIALS & SUPPLIES Office Supplies 44100 3,206 3,000 3,000 0% Paper 44110 146 400 400 0% Postage 44120 44 50 50 0% Printing & Forms 44130 172 300 300 0% Medical Supplies 44270 0 100 100 0% Other Operating Supplies 44290 2,452 20,000 7,500 -63% Office Small Equipment 44410 646 2,000 2,000 0% TOTAL MATERIALS & SUPPLIES 6,666 25,850 13,350 -48%

ADMINISTRATIVE EXPENSE Membership Dues 45110 1,255 1,300 1,325 2% Books & Subscriptions 45120 2,647 3,716 250 -93% Conference Registration Fees 45130 1,882 2,758 5,684 106% Training Expense 45140 5,593 4,500 4,500 0%

215 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

AIRSIDE OPERATIONS

Section 402

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE Meeting Expense 45150 637 500 600 20% Travel & Reimbursed Expense 45210 6,034 7,486 10,615 42%

TOTAL ADMINISTRATIVE EXPENSES 18,048 20,260 22,974 13%

TOTAL EXPENSES BEFORE FIXED ASSETS 1,962,977 2,069,871 2,348,046 13%

FIXED ASSETS Fixed Asset Acquisition 48150 44,417 0 0 0%

TOTAL SECTION EXPENSES $2,007,394 $2,069,871 $2,348,046 13%

216 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Landside Operations

Mission Statement: To enhance parking and ground transportation revenue, provide exceptional customer service to all Landside Operations end users, and maximize technological advances to ensure efficient and effective operations.

Key Duties and Responsibilities:

 Provide and maintain all aspects of Ground Transportation to provide services, collect all appropriate revenue, and maintain compliance with all RTAA regulations.  Maximize revenue by continued personnel training, exploration of potential new sources, and utilization of proven advanced technologies.  Provide the highest quality of parking services, while maintaining safe and secure facilities.  Develop a ground transportation (GT) education and customer service program.  Maintain a unified Standard Operating Procedures manual to ensure consistency by staff processes in areas such as cash handling, customer service and minor system maintenance and repairs.  With the introduction of Transportation Network Companies (TNCs) such as Uber and Lyft, closely monitor and adjust operating guidelines and technology to ensure their successful integration into RNO operations.

217 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

LANDSIDE OPERATIONS

Section 403

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $451,235 $543,000 $625,300 15% Temporary Employees 41120 7,790 6,000 0 -100% Vacation Pay 41130 36,895 3,300 2,200 -33% Sick Leave 41140 17,829 6,400 5,900 -8% Holiday Pay 41150 25,752 5,000 5,000 0% Overtime Pay 41210 19,243 16,000 21,000 31% Shift Differential 41230 20,224 20,500 21,500 5% Holiday worked Pay 41280 17,252 15,000 17,500 17% Medicare 41320 8,368 7,900 9,100 15% FICA 41321 476 0 0 0% Group Insurance 41340 103,651 119,500 129,300 8% Disability Insurance 41342 4,691 5,300 6,000 13% Vision Insurance 41344 1,450 1,900 1,800 -5% Dental Insurance 41347 11,000 11,700 10,700 -9% Workers Comp 41350 13,720 19,500 21,600 11% Retirement 41360 150,889 152,000 175,100 15% Accrued PERS Expense 41365 7,766 0 0% Uniform Allowance 41380 1,943 800 800 0%

TOTAL PERSONNEL SERVICES 900,173 933,800 1,052,800 13%

PURCHASED SERVICES Other Professional Services 43190 259,038 273,475 0 -100% Office Equipment Rental 43210 2,808 2,580 2,580 0% Equipment Rental 43211 12,162 13,788 13,788 0% Contracted Services 43340 2,026 4,100 287,143 6903% Other Repair/Maintenance Svcs 43390 0 1,980 2,200 11% Freight Expense 43430 1,169 1,000 1,100 10% Contracted Services - Towing 43450 0 250 200 -20% Other Purchased Services 43490 0 0 3,880 %

TOTAL PURCHASED SERVICES 277,203 297,173 310,891 5%

MATERIALS & SUPPLIES Office Supplies 44100 2,768 1,600 1,800 13% Paper 44110 68 250 250 0% Postage 44120 25 200 200 0% Printing & Forms 44130 10,343 11,500 12,700 10% Medical Supplies 44270 97 50 50 0% Other Operating Supplies 44290 7,572 500 2,190 338% Machinery 44330 28,021 18,800 18,800 0% Office Small Equipment 44410 0 0 850 % Sign and Sign Maintenance 44430 2,885 10,000 10,000 0% Employee Safety Equipment 44450 179 200 200 0%

TOTAL MATERIALS & SUPPLIES 51,958 43,100 47,040 9%

ADMINISTRATIVE EXPENSE Membership Dues 45110 1,265 1,340 1,500 12% Conference Registration Fees 45130 595 1,000 1,000 0% Meeting Expense 45150 0 100 100 0% 218 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

LANDSIDE OPERATIONS

Section 403

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE Travel & Reimbursed Expense 45210 529 2,000 2,000 0% Credit Card Fees 45500 240,938 250,000 286,542 15%

TOTAL ADMINISTRATIVE EXPENSES 243,327 254,440 291,142 14%

TOTAL EXPENSES BEFORE FIXED ASSETS 1,472,662 1,528,513 1,701,873 11%

FIXED ASSETS Fixed Asset Acquisition 48150 47,792 0 0 0%

TOTAL SECTION EXPENSES $1,520,454 $1,528,513 $1,701,873 11%

219 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Airport Fire

Mission Statement: Respond to emergencies including aircraft rescue and firefighting (ARFF) services, hazardous materials spill response, and emergency first aid services. In addition, Airport Fire conducts fire and safety inspections, provides fire prevention activities, and trains RTAA employees and tenants in various environmental, health and safety programs.

Key Duties and Responsibilities:

 Maintain emergency response capabilities by ensuring equipment and staffing is kept at an appropriate level.  Validate effectiveness of Driver/Operator and Acting Captain certification training programs.  Provide aircraft refueling vehicle inspection training for all Airport Fire Division employees due to rotation of inspection program.  Encourage participation in external training to maintain current fire and emergency services certifications.  Participate in training employees in fire prevention practices, confined space, fire extinguisher and hazardous materials subjects.  Maintain ARFF facilities and vehicles in operational readiness.  Ensure operational status of all division vehicles, tools and equipment. Ensure a safe, clean and operational station. Order supplies and equipment as needed.  Provide supervisory training for Fire Captains to include administrative duties and Incident Commander organizational responsibilities.  Respond to emergencies on RTAA property to provide protection of life, property and the environment.  Provide specified inspections of all buildings, hangars, aircraft refueling vehicles, and other equipment. Provide hazardous operations standbys as required.  Conduct quarterly fire and safety inspections on airport property including Reno Stead Airport (RTS) and tenants.  Enhance fire prevention inspection program for RNO and RTS.  Maintain high priority focus on safety during firefighting operations and for RNO employees during their daily assigned duties.  Conduct disaster training as required by the FAA and provide required OSHA safety training.  Maintain proficiency as required by standards and codes.  Prepare all firefighters for bi-annual Emergency Medical Technician recertification.  Familiarize fire division members with new Airport Emergency Plan procedures.  Train with local mutual aid agencies focusing on equipment capabilities, communications, incident command procedures and ARFF firefighting techniques

220 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Airport Fire - Initiatives:

FY 2016-17 Current Initiatives

1. Replace aging ARFF equipment.

Strategic Initiative/Guiding Principle: Safety and Security

Description: In FY 2015-16, the RTAA received a discretionary FAA Airport Improvement Program (AIP) Grant for $1,153,125 to purchase a new 3,000 gallon Aircraft Rescue and Firefighting Vehicle and associated ancillary equipment. This equipment has been bid and is currently under construction. In FY 2016-17, staff will need to formally accept the vehicle and obtain training.

In addition, the RTAA submitted PFC Application #12 and obtained FAA approval on April 24, 2015 to purchase a Class 3 Quick Response Vehicle with Drivers Enhanced Vision System (DEVS) including power tools and equipment. The age of the existing ARFF vehicle scheduled for replacement is 20 years old. This equipment is worn out and has reached the end of its useful and reliable service life.

Performance Measure: Delivery of 3,000 gallon ARFF replacement vehicle and complete the request for proposal for the Quick Response Vehicle by June 30, 2017.

Progress: 100% Completed. The RTAA issued acceptance and payment on the 3,000 gallon ARFF replacement vehicle in December 2016. Proposal submissions on the Quick Response Vehicle were received on April 27, 2017 and staff is currently reviewing the submissions.

221 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

AIRPORT RESCUE AND FIRE

Section 404

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $1,138,113 $1,408,200 $1,470,600 4% Vacation Pay 41130 105,355 2,300 2,200 -4% Sick Leave 41140 (24,567) 4,900 4,300 -12% Holiday Pay 41150 28,705 69,300 71,400 3% Comp time 41160 126,269 100,000 115,000 15% Overtime Pay 41210 74,077 105,000 135,000 29% FLSA Overtime Pay 41211 41,967 60,000 60,000 0% Overtime Call Back 41213 5,640 8,000 8,000 0% Medicare 41320 22,448 20,000 21,000 5% Group Insurance 41340 269,209 266,600 269,200 1% Disability Insurance 41342 1,348 6,700 6,900 3% Vision Insurance 41344 217 200 200 0% Dental Insurance 41347 1,431 1,500 1,500 0% Workers Comp 41350 32,796 54,600 35,200 -36% Retirement 41360 516,180 544,000 569,300 5% Accrued PERS Expense 41365 24,610 0 0 0% Uniform Allowance 41380 9,532 12,000 13,000 8%

TOTAL PERSONNEL SERVICES 2,373,331 2,663,300 2,782,800 4%

PURCHASED SERVICES Office Equipment Rental 43210 1,914 2,200 2,200 0% Contracted Services 43340 5,581 8,611 10,011 16% Other Repair/Maintenance Svcs 43390 2,197 2,986 2,200 -26% Freight Expense 43430 1,942 2,000 2,000 0% Other Purchased Services 43490 2,386 2,025 1,875 -7%

TOTAL PURCHASED SERVICES 14,019 17,822 18,286 3%

MATERIALS & SUPPLIES Office Supplies 44100 2,199 2,100 2,100 0% Paper 44110 211 300 300 0% Postage 44120 6 25 25 0% Printing & Forms 44130 2,675 650 650 0% Chemicals 44220 3,703 4,682 5,270 13% Firefighting Agent AFFF 44225 7,770 15,750 15,750 0% Janitorial Paper Supplies 44250 361 550 550 0% Janitorial Supplies 44260 1,420 2,000 2,000 0% Medical Supplies 44270 3,362 4,030 19,368 381% Other Operating Supplies 44290 0 3,825 5,820 52% Turn Outs 44291 22,350 5,400 5,570 3% Other Repairs-Maint Supplies 44390 157 800 800 0% Small Tools - Minor Equipment 44400 10,053 7,804 12,400 59% Office Small Equipment 44410 0 606 400 -34% Employee Safety Equipment 44450 8,164 7,978 19,608 146% Hazardeous Materials Response 44451 1,124 1,535 3,718 142% Emg. Preparedness Stations 44453 297 1,000 7,580 658%

TOTAL MATERIALS & SUPPLIES 63,854 59,035 101,909 73%

222 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

AIRPORT RESCUE AND FIRE

Section 404

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE ADMINISTRATIVE EXPENSE Membership Dues 45110 1,081 1,230 1,280 4% Books & Subscriptions 45120 2,310 3,487 2,068 -41% Conference Registration Fees 45130 2,445 3,965 11,560 192% Training Expense 45140 21,350 17,205 30,296 76% Meeting Expense 45150 384 300 300 0% Travel & Reimbursed Expense 45210 17,278 31,342 25,628 -18% Employee Milege Reimbursement 45240 79 110 110 0%

TOTAL ADMINISTRATIVE EXPENSES 44,926 57,639 71,242 24%

TOTAL EXPENSES BEFORE FIXED ASSETS 2,496,130 2,797,796 2,974,237 6%

FIXED ASSETS Fixed Asset Acquisition 48150 64,220 30,190 19,500 -35%

TOTAL SECTION EXPENSES $2,560,350 $2,827,986 $2,993,737 6%

223 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Airport Police

Mission Statement: Provided law enforcement services to ensure Reno-Tahoe International Airport (RNO) provides a safe and secure facility in accordance with Transportation Security Regulation (TSR), Part 1542 and Nevada Revised Statutes.

Key Duties and Responsibilities:

 Provide Airport Police Officer vehicle and foot patrols for the safety of the traveling public.  Meet the requirements of Transportation Security Regulation (TSR) Part 1542 and assist air carriers with requirements for TSR Part 1542 and 1544.  Provide Field Training Officer Program for new officer(s) and continue professional development training and annual training requirements in accordance with Nevada Peace Officer Standards and Training (P.O.S.T.).  Supply and maintain uniforms and equipment.  Document criminal activity and conduct investigations occurring on airport property. Conduct investigations of criminal incidents occurring on airport property.  Participate and comply in the Transportation Security Administration (TSA) National Explosive Detection Canine Team Program.  Maintain affiliation and certification with the Commission on Accreditation for Law Enforcement (CALEA).  Provide law enforcement support for Customs and Border Protection during arriving international flights.

224 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

AIRPORT POLICE

Section 405

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $1,407,474 $1,798,600 $1,892,200 5% Vacation Pay 41130 105,397 8,200 7,800 -5% Sick Leave 41140 56,788 11,000 10,800 -2% Holiday Pay 41150 74,877 14,000 14,000 0% Comp time 41160 43,786 29,000 30,000 3% Overtime Pay 41210 127,214 90,000 100,000 11% FLSA Overtime 41211 5,703 0 5,000 % Overtime Call Back 41213 1,316 1,500 1,500 0% Shift Differential 41230 54,442 60,000 57,000 -5% Holiday worked Pay 41280 42,655 35,000 42,000 20% Medicare 41320 27,251 25,800 27,200 5% Group Insurance 41340 207,546 275,500 300,700 9% Disability Insurance 41342 12,927 16,200 16,500 2% Vision Insurance 41344 3,117 4,300 4,100 -5% Dental Insurance 41347 23,519 26,900 26,000 -3% Workers Comp 41350 29,225 51,000 51,000 0% Retirement 41360 646,224 697,400 733,500 5% Accrued PERS Expense 41365 34,354 0 0 0% Uniform Allowance 41380 18,625 18,000 18,000 0% Post Employment Health Plan 41410 0 1,000 1,000 0%

TOTAL PERSONNEL SERVICES 2,922,441 3,163,400 3,338,300 6%

PURCHASED SERVICES Data Processing 43130 5,884 3,466 3,466 0% Office Equipment Rental 43210 5,622 5,100 5,100 0% Contracted Services 43340 4,199 6,000 6,000 0% Other Repair/Maintenance Svcs 43390 0 1,400 0 -100% Freight Expense 43430 728 1,000 1,000 0% Other Purchased Services 43490 1,587 4,000 4,000 0%

TOTAL PURCHASED SERVICES 18,021 20,966 19,566 -7%

MATERIALS & SUPPLIES Office Supplies 44100 5,531 4,000 4,000 0% Paper 44110 290 250 250 0% Postage 44120 95 200 100 -50% Printing & Forms 44130 946 1,000 500 -50% Medical Supplies 44270 70 250 250 0% Firearms 44293 5,761 6,500 15,100 132% Canine 44294 6,983 7,000 7,000 0% Vehicles 44310 723 0 0 0% Small Tools - Minor Equipment 44400 14,421 15,000 15,000 0% Office Small Equipment 44410 283 500 500 0% Employee Safety Equipment 44450 7,766 7,500 7,500 0%

TOTAL MATERIALS & SUPPLIES 42,869 42,200 50,200 19%

225 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

AIRPORT POLICE

Section 405

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE ADMINISTRATIVE EXPENSE Membership Dues 45110 4,545 5,165 5,920 15% Books & Subscriptions 45120 389 0 0 0% Conference Registration Fees 45130 2,389 3,250 5,385 66% Training Expense 45140 4,128 7,500 7,500 0% Meeting Expense 45150 43 0 0 0% Travel & Reimbursed Expense 45210 9,584 10,500 19,500 86%

TOTAL ADMINISTRATIVE EXPENSES 21,077 26,415 38,305 45%

TOTAL EXPENSES BEFORE FIXED ASSETS 3,004,409 3,252,981 3,446,371 6%

FIXED ASSETS Fixed Asset Acquisition 48150 86,015 0 58,925 %

TOTAL SECTION EXPENSES $3,090,424 $3,252,981 $3,505,296 8%

226 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Airport Security

Mission Statement: Provide airport security services to ensure Reno-Tahoe International Airport (RNO) provides a secure facility in accordance with U.S. Code of Federal Regulations, Part 1542 and other Transportation Security Administration (TSA) security directives.

Key Duties and Responsibilities:

 Write, maintain and ensure compliance with the TSA approved Airport Security Program.  Provide 24/7/365 patrols and staffing to ensure security of terminal, ground transportation areas and airfield access gates.  Develop security plans to serve as guidelines to employees, tenants and contractors to meet the applicable standards of 49 CFR 1542 and the RTAA rules and regulations.  Ensure all RNO security access badge applicants meet TSA requirements with regard to Criminal History Records Checks and Security Threat Assessments.  Provide input and review construction plans of RNO projects to ensure that the physical security and TSA requirements for protecting facilities are met.  Attend industry seminars and keep current on security related news and trends.  Provide security training to all security badge holders and ensure the relevance and accuracy of Interactive Employee Training.  Attend necessary meetings both within and outside RTAA to provide input and gather information on security related matters.  Ensure general maintenance and safe operation of all Security Division vehicle and bicycles.  Provide for the professional growth of Security Specialists through training, staff meetings, and feedback on work performance.  Meet requirements of 14 CFR Part 1542 and other Transportation Security Administration (TSA) security directives.  Facilitate the annual aviation security tabletop exercise.  Provide for the security of the traveling public through responses to door alarms, inspections of badges, badge holders and deliveries.

Airport Security - Initiatives:

FY 2016-17 Current Initiatives

1. Obtain TSA certification and funding for Exit Lane Monitoring Project.

Strategic Initiative/Guiding Principle: Safety and Security.

227 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Description: The passenger exit from the secure areas within the concourses to the baggage claim and ground transportation areas of the terminal building require staffing to monitor that no unauthorized access is permitted. Currently, the TSA has responsibility for monitoring and preventing unauthorized access. To enhance the security of this portion of the access control system, this project is to implement a technology and facility solution for exit lane monitoring.

Performance Measure: Review the programming study completed by the Planning and Environmental Division and identify potential funding options. If feasible, obtain TSA certification for the unmanned exit lane project before June 30, 2017.

Progress: 100% Completed. The FAA issued an opinion that this project is not eligible for FAA Airport Improvement Program (AIP) Grants or PFC funding. Based on this decision, the project has been placed on hold pending future re-evaluation.

228 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

AIRPORT SECURITY

Section 407

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $634,068 $757,700 $850,100 12% Vacation Pay 41130 51,728 2,800 3,500 25% Sick Leave 41140 33,619 6,300 5,700 -10% Holiday Pay 41150 36,953 11,000 11,000 0% Overtime Pay 41210 22,224 25,000 25,000 0% Shift Differential 41230 30,531 30,000 31,000 3% Holiday worked Pay 41280 25,109 30,000 25,000 -17% Medicare 41320 11,809 11,000 12,300 12% Group Insurance 41340 136,684 157,900 198,000 25% Disability Insurance 41342 6,284 7,000 7,900 13% Vision Insurance 41344 2,030 2,500 2,700 8% Dental Insurance 41347 15,381 15,200 16,600 9% Workers Comp 41350 19,358 28,400 30,700 8% Retirement 41360 213,429 212,200 238,000 12% Accrued PERS Expense 41365 10,896 0 0 0% Uniform Allowance 41380 5,989 7,500 8,000 7%

TOTAL PERSONNEL SERVICES 1,256,093 1,304,500 1,465,500 12%

PURCHASED SERVICES Other Professional Services 43190 33,000 40,000 40,000 0% Office Equipment Rental 43210 1,681 2,000 2,000 0% Contracted Services 43340 980 1,500 1,000 -33% Other Repair/Maintenance Svcs 43390 648 500 750 50% Freight Expense 43430 136 400 350 -13%

TOTAL PURCHASED SERVICES 36,445 44,400 44,100 -1%

MATERIALS & SUPPLIES Office Supplies 44100 21,035 25,000 25,000 0% Paper 44110 98 100 100 0% Postage 44120 6 25 25 0% Printing & Forms 44130 381 1,000 1,000 0% Medical Supplies 44270 57 75 75 0% Small Tools - Minor Equipment 44400 746 500 1,000 100% Office Small Equipment 44410 299 900 300 -67% Employee Safety Equipment 44450 497 500 500 0%

TOTAL MATERIALS & SUPPLIES 23,119 28,100 28,000 0%

ADMINISTRATIVE EXPENSE Membership Dues 45110 275 275 275 0% Conference Registration Fees 45130 775 2,900 2,150 -26% Training Expense 45140 0 1,500 500 -67% Travel & Reimbursed Expense 45210 1,881 9,750 4,500 -54% Other Advertising & Promotion 45390 172 500 600 20%

TOTAL ADMINISTRATIVE EXPENSES 3,103 14,925 8,025 -46%

229 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

AIRPORT SECURITY

Section 407

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE TOTAL EXPENSES BEFORE FIXED ASSETS 1,318,760 1,391,925 1,545,625 11%

FIXED ASSETS Fixed Asset Acquisition 48150 0 0 205,570 %

TOTAL SECTION EXPENSES $1,318,760 $1,391,925 $1,751,195 26%

230 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Planning and Environmental Services

Mission Statement: Develop, maintain and plan for the future orderly development of Reno- Tahoe International Airport (RNO) and Reno-Stead Airport (RTS), which satisfies aviation demand and yields safe, efficient, economical and environmentally acceptable air transportation facilities.

Key Duties and Responsibilities:

Planning  Complete an Airport Master Plan for RNO.  Implement an enterprise Geographical Information System (GIS) at RNO.  Assist with conversion of under-utilized vacant land into revenue producing use.  Coordinate with FAA on various capital improvement projects.  Coordinate with outside agencies and internal stakeholders regarding aviation development planning.  Conduct and coordinate with outside agencies and internal stakeholders regarding land development and land use planning.  Submit to the FAA the annual Airport Capital Improvement Programs (ACIP) for both RNO and RTS.  Maintain and update the Airport Layout Plans for RNO and RTS.  Review development proposals and regulation and code changes with an emphasis on noise mitigation, building height guidelines and the safe operation of aircraft using RTAA facilities.

Environmental  Complete an update to the Jurisdictional Determination by the U.S. Army Corps of Engineers of RNO water systems.  Develop an annual report that provides an overview of RTAA sustainability achievements.  Coordinate environmental planning programs including the RTAA Environmental Management System.  Maintain and expand the airport recycling program.  Fulfill environmental compliance and regulatory programs.  Complete annual storm water pollution prevention inspections of RTAA and tenant facilities.  Complete annual update of water rights recognition.  Oversee the RTS Solvent Site consent decree remediation program.  Complete annual regulated garbage compliance agreement and oversee quarterly inspections pursuant to U.S. Department of Agricultural (USDA), Animal and Plant Health Inspection Services (APHIS), and U.S. Customs Border Protection (CBP).  Identify and monitor underground and aboveground storage tanks for RTAA and tenants.

231 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

 Evaluate and coordinate the proposed use of solar power for electrical generation at both RNO and RTS airports.

Noise  Track and monitor new flight procedures.  Operate and maintain a permanent noise and operations monitoring system.  Prepare RNO annual noise contours.  Receive, review and respond to all noise complaint calls and sound insulation program warranty calls.  Facilitate Airport Noise Advisory Panel.  Address miscellaneous noise issues.

Planning and Environmental Services - Initiatives:

FY 2016-17 Current Initiatives

1. Update the Airport Layout Plan (ALP) for both the Reno-Tahoe International Airport (RNO) and Reno-Stead Airport (RTS).

Strategic Initiative/Guiding Principle: (1) Increase Air Service; (2) Optimize General Aviation Operations and Services; (3) Expand Cargo Development and Services; and (4) Facilitate Economic Development at Both Airports.

Description: The Airport Layout Plan (ALP) serves as a critical planning tool that depicts both existing facilities and planned development for an airport. Sponsors of airport development carried out at federally obligated airports must accomplish the improvement in accordance with an FAA-approved ALP.

By definition, the ALP is a plan for a specific airport that shows:  Boundaries and proposed additions to all areas owned or controlled by the sponsor for airport purposes.  The location and nature of existing and proposed airport facilities and structures.  The location on the airport of existing and proposed non-aviation areas and improvements thereon.

With the acquisition of digital orthophotography in 2015, the RTAA is converting the ALP for both airports to a digital format and updating in the RTAA Geographical Information System (GIS) to accurately capture all recent changes since the previous 2011 submittal.

Performance Measure: RTAA submission and FAA approval of both RNO and RTS ALPs by June 30, 2017.

232 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Progress: 100% Completed. The RTS ALP was submitted to the FAA Phoenix Airport District Office (ADO) and approved in March 2017.

The FAA has completed a draft eALP for RNO and has made it available for planning staff to review and comment. Staff addressed issues and has incorporated the eALP data into the Master Plan.

2. Update Reno-Tahoe International Airport (RNO) Master Plan.

Strategic Initiative/Guiding Principle: (1) Increase Air Service; (2) Expand Cargo Development and Service, (3) Optimize General Aviation Operations and Services, (4) Facilitate Economic Development at Both Airports, and (5) Provide a Positive Environment and Experience for All.

Description: The last master plan for RNO was completed in 1991. Since then, all necessary capital projects identified in the 1991 master plan have been completed. Additionally, significant changes to the aviation industry, passenger travel patterns, and the regional economy have taken place. In order to utilize federal funding, this master plan will be completed in accordance with FAA AC 150/5070-6B, Aviation Master Plans.

Performance Measure: Complete 60% of RNO master plan by June 30, 2017.

Progress: 60% Completed. The Master Plan for RNO is on schedule to be completed by June 30, 2018. As of June 30, 2017, the team has completed three of the major deliverables including the Evaluation of Existing Conditions, the Aviation Forecast and the Facility Requirement / Demand Capacity Analysis chapters.

As part of this effort, significant outreach was conducted including a series of public meetings and small group conversations with community leaders.

In addition, significant outreach has been focused on airport employees and tenants in the development of the Facility Requirements Chapter. Staff hosted two on-airport workshops on May 24, 2017 to solicit input on solutions to RNO facilities including existing or projected deficiencies. At the workshops, airport employees and tenants offered their opinions on topics such as ground transportation demands (e.g. additional public parking and rental car facilities) and post-security passenger needs in the terminal (e.g. additional restrooms and concessions), for example.

Project efforts have also included the development of the Airport Recycling, Reuse, and Waste Reduction Plan. This plan is a non-critical path effort required by the FAA for all

233 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

federally funded airport master plans. The Plan assesses the existing recycling program and develops recommendations to enhance waste diversion from landfills.

Recent efforts on the Airport Master Plan have focused on alternatives development. Alternatives development, which identities solutions to address current and future facility deficiencies, consists of at least three (3) phases.

Phase 1 includes creation of the evaluation criteria matrix to be used to weigh the alternatives and development of preliminary, conceptual alternatives. Phase 1 was completed in July 2017 and concluded with an intensive two-hour workshop with the Senior Leadership Team.

Phase 2 alternatives development, which further develops and refines the alternatives and begins the formal evaluation process, is underway. Phase 2 outreach is targeted to begin in September 2017 and will include a RTAA management team workshop, all employee and all tenant open houses, a public information meeting, a master plan working group meeting, and a Board Workshop. The Board Workshop will be held in October 2017.

Phase 3 alternatives development will result in a new draft chapter (Airport Alternatives and Environmental Considerations) which will identify no more than three (3) alternatives per “area” (e.g. landside, terminal, etc.) based on the evaluation criteria.

3. Explore financial feasibility of Renewable Energy Projects (i.e. Solar) and obtain funding, if available.

Strategic Initiative/Guiding Principle: Financial integrity and Environmental Responsibility.

Description: With land at both RNO and RTS available to be used for renewable energy development and the potential to reduce utility costs to the RTAA, this initiative will explore options available and the return on investment of these options. If the analysis demonstrates financial feasibility, staff will investigate funding options such as private power purchase agreements and Clean Energy Renewable Bonds.

Performance Measure: Complete analysis; prepare staff recommendations, and present next steps, if financially feasible, to the Board of Trustees by June 30, 2017.

Progress: 100% Completed. During FY 2016-17, staff actively explored both the feasibility and financial strategies of renewable energy generation at both RNO and RTS. This effort included several meetings with energy development companies such as Ameresco, Boeing, Solar City, Sunworks, and Tesla.

234 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Staff also coordinated with NV Energy to develop electrical rate scenarios and financial strategies for the various solar systems under consideration. Due to the unique characteristics of the RNO’s electrical demand, system siting requirements, and Nevada’s rules and regulations on interconnection, the RTAA is faced with a range of regulatory and financial hurdles associated with renewable energy and battery storage systems.

In addition, a significant reduction in the cost of electricity provided by NV Energy over the past few years has limited the ability of renewable energy projects to generate a reasonable return on investment. In the future if electricity costs increase and/or the cost of renewable system decreases, the RTAA will again focus its review on the financial benefits of renewable energy projects. Staff will continue to hold discussions and work with renewable energy partners in the community.

In the past year, staff continued to monitor and participate in the Nevada’s legislative processes to overcome the regulatory and financial hurdles associated with the installation of renewable energy and battery storage systems. Recently, stakeholder discussions have collectively addressed and developed a schedule for reviewing and modifying NV Energy tariffs governing interconnection of generating facilities (including battery systems).

4. Continue to enhance RTAA’s Sustainability Program.

Strategic Initiative/Guiding Principle: Environmental Responsibility

Description: The RTAA’s approach to sustainability will expand the existing Environmental Management System’s (EMS’s) environmental compliance and natural resource conservation initiatives to align with the RTAA’s strategic priorities and four sustainability elements of Economic Viability (E), Operations Excellence (O), Natural Resource Conservation (N) and Social Responsibility (S).

Performance Measure: Develop an annual Sustainability Report reflecting EONS.

Progress: 100% Completed. The annual report was completed and staff received feedback and comments from the Senior Leadership team. In addition, staff is actively coordinating with all RTAA divisions to develop and promote sustainability initiatives that will meet the long-term demands of aviation development, responsibility to our community, financially self-sustaining, and protection of the natural environment.

FY 2017-18 New Initiatives

1. Update the U.S. Army Corps of Engineers Waters of the US Jurisdictional Determination for RNO.

235 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Strategic Initiative/Guiding Principle: Environmental Responsibility

Description: The current Jurisdictional Determination (JD) expires on January 1, 2019. All RNO projects that request approval or funding from the FAA require verification of the JD status and an evaluation of the project’s potential direct and indirect impacts on the Waters of the U.S.

Performance Measure: Receipt of updated RNO JD prior to June 30, 2018.

2. Roll out the Geographical Information Systems (GIS) applications and develop an employee training program.

Strategic Initiative/Guiding Principle: Increase Air Service, Optimize General Aviation Operations & Services, Expand Cargo Development & Service, and Facilitate Economic Development at RNO

Description: As of July 1, 2017, there will be five (5) GIS applications ready for use by employees upon formal training. The consultant’s data maintenance policies and recommendations will form the framework for the GIS training program.

Performance Measure: Train initial group of employees on new GIS applications by June 30, 2018.

3. Conduct an employee/tenant needs assessment for electric vehicle charging stations and identify associated resource requirements.

Strategic Initiative/Guiding Principle: Environmental Responsibility.

Description: With the forecasted growth and improved affordability of electric cars, this initiative will evaluate the current and future need of charging stations by RTAA employees and tenants.

Performance Measure: Complete the assessment and submit a capital project request for additional charging stations, if needed, by June 30, 2018.

4. Enhance the RTAA’s recycling program to further encourage and support the collection of recyclable materials.

Strategic Initiative/Guiding Principle: Environmental Responsibility.

236 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Description: The recycling program primary focus is to collect commingled (single-stream) recyclables at select terminal and concourse locations. The single-stream collection includes all plastics, aluminum cans, glass, mixed paper, and cardboard. This recycling initiative helps improve the RTAA’s recycling and waste diversion efforts, assists the airlines with its single- stream recycling programs, and reduces hauling and recycling costs. Other recyclable materials such as batteries continue to be collected separately.

Performance Measure: Collect and recycle 15% or more of RNO’s total waste volume.

237 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

PLANNING AND ENVIRONMENTAL SERVICES

Section 502

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $502,828 $691,000 $720,500 4% Vacation Pay 41130 44,508 7,300 5,100 -30% Sick Leave 41140 15,650 11,200 10,900 -3% Holiday Pay 41150 30,361 0 0 0% Overtime Pay 41210 0 100 200 100% Automobile Allowance 41250 4,616 4,800 4,800 0% Medicare 41320 8,660 10,000 10,400 4% Group Insurance 41340 46,987 58,900 75,600 28% Disability Insurance 41342 5,849 7,100 7,400 4% Vision Insurance 41344 797 1,000 1,100 10% Dental Insurance 41347 5,992 5,600 6,500 16% Workers Comp 41350 564 700 700 0% Retirement 41360 162,273 193,600 201,700 4% Accrued PERS Expense 41365 8,521 0 0 0%

TOTAL PERSONNEL SERVICES 837,605 991,300 1,044,900 5%

PURCHASED SERVICES Data Processing 43130 9,480 2,500 0 -100% Other Professional Services 43190 10,242 18,000 32,500 81% Office Equipment Renta 43210 3,973 4,800 3,900 -19% Other Repair/Maintenance Svcs 43390 2,430 6,320 5,200 -18% Freight Expense 43430 57 150 150 0% Permits & Recorders Fees 43460 920 1,150 1,150 0% Other Purchased Services 43490 5,281 9,420 9,420 0%

TOTAL PURCHASED SERVICES 32,382 42,340 52,320 24%

MATERIALS & SUPPLIES Office Supplies 44100 1,841 3,000 3,000 0% Paper 44110 462 600 1,000 67% Postage 44120 187 300 200 -33% Printing & Forms 44130 537 600 800 33% Office Small Equipmen 44410 9,763 0 0 0%

TOTAL MATERIALS & SUPPLIES 12,790 4,500 5,000 11%

ADMINISTRATIVE EXPENSE Membership Dues 45110 2,340 2,845 2,470 -13% Books & Subscriptions 45120 1,327 1,600 1,600 0% Conference Registration Fees 45130 3,930 4,800 5,065 6% Training Expense 45140 485 1,100 1,350 23% Meeting Expense 45150 449 1,000 5,000 400% Travel & Reimbursed Expense 45210 9,393 16,310 16,025 -2% Legal Advertisements 45340 1,966 1,200 0 -100%

TOTAL ADMINISTRATIVE EXPENSES 19,890 28,855 31,510 9%

TOTAL SECTION EXPENSES $902,667 $1,066,995 $1,133,730 6%

238 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Engineering

Mission Statement: Provide programming, engineering, and construction management for the development of capital projects and facilities for safe and efficient airport operations for Reno-Tahoe International Airport (RNO) and Reno-Stead Airport (RTS) users and employees.

Key Duties and Responsibilities:

 Define and allocate Engineering Division resources.  Provide project programming and cost estimating for capital project budgets.  Manage engineering and construction management services for all RNO and RTS capital improvement projects.  Provide architecture, computer aided design, and graphics technical support.  Administer all FAA Airport Improvements Program (AIP) Grants.  Manage the Qualified Consultants List and Request for Qualification (RFQ) solicitations.  Solicit, negotiate, and manage all engineering professional services contracts.  Procure and administer construction contracts.  Ensure compliance with all federal and state labor and wage requirements for construction contracts.  Coordinate and ensure compliance with the Disadvantaged Business Enterprise (DBE) Program.  Provide technical support services for RTAA tenant improvements.  Implement a Small Business Enterprise (SBE) component into the RTAA Disadvantaged Business Enterprise (DBE) program.

Engineering - Initiatives:

FY 2016-17 – Current Initiatives

1. Complete the Disadvantage Business Enterprise (DBE) Disparity Study.

Strategic Initiative/Guiding Principle: Financial Integrity.

Description: Assess DBE utilization on construction projects at RNO and RTS.

Performance Measure: Completion of study no later than December 31, 2016.

Progress: 85% Completed. The Disparity Study consists of thirteen separate project tasks including, public outreach, data gathering, market analysis, and evaluation of DBE availability and utilization.

239 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

The Consultant has analyzed DBE utilization data from recent construction projects by the participating agencies. After receiving feedback from multiple stakeholders, the project timeline of fourteen months has been extended an additional 60 days in order to conduct additional stakeholder outreach.

A draft report has been reviewed by staff and comments submitted to the Consultant in order to finalize the report. A review meeting with the consultant and the Consortium was conducted on July 17, 2017. Review comments from the Consortium were discussed with the consultant and additional analysis will be conducted regarding DBE availability. The anticipated completion date for the final report is October 2017.

2. Refine Estimate at Completion (EAC) Projections and enhance monthly reporting of cost forecast and budget tracking.

Strategic Initiative/Guiding Principle: Financial Integrity.

Description: Continual update of estimated project cost and program budget variance.

Performance Measure: Updated reporting by RTAA Project Managers on assigned construction projects on a monthly basis by June 30, 2017.

Progress: 100% Completed. EAC projections have been incorporated into all Board memos and presentations for award of construction contracts and Professional Services Agreements (PSA). The monthly project expenditures are reviewed and tracked by staff and the RTAA’s contract construction manager to monitor project Estimate to Complete (ETC). Major construction projects include a project close out EAC presentation to the Planning & Construction Committee based on final project costs.

3. Distribute and manage construction bid documents using a Web based system.

Strategic Initiative/Guiding Principle: Financial Integrity.

Description: Implementation of a web based platform for distribution of construction contract bid documents.

Performance Measure: Use of electronic document control by June 30, 2017.

Progress: Project Deferred. A web based project management system was installed, tested, and evaluated during the first six months of FY 2016-17. The determination has been made to retain the existing contract document distribution system in lieu of a web based system.

240 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Electronic bid documents are currently provided to prospective bidders by the design Consultant. This avoids user interface issues with contractors and vendors.

4. Evaluate cost estimating using an e-based software platform.

Strategic Initiative/Guiding Principle: Financial Integrity

Description: Review and evaluation of construction industry specific cost estimating systems.

Performance Measure: Report on the evaluation, comparison, and recommendations of commonly used cost estimating programs by June 30, 2017.

Progress: 100% Completed. Staff researched web based construction costs estimating applications including subscriber costs, applicability to local labor and material costs and availability of specialized aviation related factors. The most applicable software was installed and evaluated with a focus on its suitability with the RTAA’s work flow.

In January 2017, staff determined that construction costs from recent construction projects to be more appropriate for estimating RTAA airfield construction projects than generic cost estimating programs. This is primarily attributed to the specialized type of airfield construction, FAA specification requirements, and schedule and operational constraints, which are not sufficiently represented in e-based software.

FY 2017-18 New Initiatives

1. Update and modify RTAA Disadvantaged Business Enterprise (DBE) program goals to reflect findings of the Inter-Agency DBE Disparity Study.

Strategic Initiative/Guiding Principle: Financial Integrity

Description: Update the current RTAA DBE program goals to incorporate applicable information from the 2016 DBE Disparity Study for DBE utilization on federally funded construction projects.

Performance Measure: Completion of DBE goals update by June 30, 2018.

2. Reconfigure the Airport Capital Improvement Program (ACIP) airfield capital improvement projects, including program level modifications, to reflect the realignment of identified additional project scope.

241 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Strategic Initiative/Guiding Principle: Safety and Security and Financial Integrity.

Description: Realignment of project scope and sequence for future airfield construction projects utilizing the RNO Master Plan to inform the ACIP funding request.

Performance Measure: Incorporate program modifications into the FY 2018 ACIP submittal to the FAA in January 2018.

242 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

ENGINEERING AND CONSTRUCTION

Section 503

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $391,311 $457,500.00 $479,600.00 5% Vacation Pay 41130 40,008 6,500 8,400 29% Sick Leave 41140 22,596 7,700 8,600 12% Holiday Pay 41150 26,726 0 0 0% Medicare 41320 6,843 6,200 6,500 5% Group Insurance 41340 45,590 49,600 56,400 14% Disability Insurance 41342 4,314 4,900 5,100 4% Vision Insurance 41344 725 800 800 0% Dental Insurance 41347 5,455 5,000 5,000 0% Workers Comp 41350 564 500 500 0% Retirement 41360 127,650 135,700 142,500 5% Accrued PERS Expense 41365 6,351 0 0%

TOTAL PERSONNEL SERVICES 678,132 674,400 713,400 6%

PURCHASED SERVICES Other Professional Services 43190 0 15,500 10,500 -32% Office Equipment Rental 43210 1,903 2,000 2,000 0% Freight Expense 43430 36 300 200 -33% Other Purchased Services 43490 4,441 5,600 5,600 0%

TOTAL PURCHASED SERVICES 6,380 23,400 18,300 -22%

MATERIALS & SUPPLIES Office Supplies 44100 1,282 800 600 -25% Paper 44110 71 400 400 0% Postage 44120 63 200 200 0% Printing & Forms 44130 344 200 200 0%

TOTAL MATERIALS & SUPPLIES 1,760 1,600 1,400 -13%

ADMINISTRATIVE EXPENSE Membership Dues 45110 949 1,600 1,600 0% Books & Subscriptions 45120 0 200 600 200% Conference Registration Fees 45130 1,355 4,000 4,800 20% Training Expense 45140 0 200 200 0% Meeting Expense 45150 131 400 400 0% Travel & Reimbursed Expense 45210 1,613 3,600 5,400 50% Legal Advertisements 45340 985 1,200 1,200 0%

TOTAL ADMINISTRATIVE EXPENSE 5,032 11,200 14,200 27%

TOTAL SECTION EXPENSES $691,304 $710,600 $747,300 5%

243 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Director of Facilities and Maintenance

Mission Statement: To maintain RTAA facilities and properties in a safe, secure and efficient manner.

Key Duties and Responsibilities:  Inspect RTAA property to support projects and maintenance requirements.  Ensure a quality passenger experience by monitoring the daily operations and maintenance of the terminal building and operating systems and equipment.  Train and develop a professional staff.  Provide management and oversight of Tenant Improvement Permit program.  Develop, correct, maintain, promote and enhance various on-going maintenance programs and investigate and implement new programs.  Participate in bargaining unit negotiations and employee relations.  Ensure proper management, accurate project scope development, adequate and timely completion of capital projects.  Research and pursuance of energy efficient building controls, lighting and equipment upgrades.  Manage Rental Car Facility maintenance and CIP program of all airport owned rental car facilities.  Manage all systems and equipment for code and regulatory compliance.

Director of Facilities and Maintenance - Initiatives:

FY 2016-17 Current Initiatives

1. Complete the FY 2016-17 Maintenance Capital Improvement Project (CIP) Program.

Strategic Initiative/Guiding Principle: Safety and Security, Financial Integrity and Environmental Responsibility.

Description: This initiative will complete high priority capital improvement projects to maintain RTAA assets, promote safety and security and enhance environmental responsibility

Performance Measure: Complete design and construction of the following projects by June 30, 2017:

244 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Safety and Security  Install Fire Sprinkler System in Warehouse

Financial Integrity and Environmental Responsibility  Building Control Systems Upgrade, Phase I

Progress: Plans and specifications for the fire sprinkler system in the warehouse have been completed and the construction formal bid issued in May of 2017. Unfortunately, no bids were received by the established deadlines and a notice of a Failure to Receive Responsible Bids was issued per Nevada Revised Statutes (NRS 332.148). Staff is negotiating directly with a potential contractor and a contract was awarded in August 2017.

As part of the FY 2017-18 Budget discussions, staff decided to incorporate Phase I of the Building Controls System Upgrade into a larger project to be completed in the next fiscal year. Please see Initiative #1 below.

FY 2017-18 New Initiatives

1. Upgrade Building Control Systems, Phase I and II

Strategic Initiative/Guiding Principle: Financial Integrity

Description: Convert and upgrade HVAC controls and software from pneumatic control to the digital control system in the Baggage Claim area.

Performance Measure: Project to be designed and completed by June 30, 2018.

2. Replace 3rd floor garage lighting with light-emitting diode (LED) technology.

Strategic Initiative/Guiding Principle: Environmental Responsibility and Financial Integrity.

Description: This initiative will reduce electricity usage and associated costs associated with the parking garage lighting. LEDs have many advantages over incandescent light sources, including lower energy consumption, longer lifetime, improved physical robustness, and smaller size. They also have fewer environmental concerns linked to their disposal.

Performance Measure: Complete the LED project by June 30, 2018.

245 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

3. Complete the FY 2017-18 Maintenance Capital Improvement Project (CIP) Program.

Strategic Initiative/Guiding Principle: Safety and Security and Financial Integrity.

Description: This initiative will complete high priority capital improvement projects to maintain RTAA assets and promote safety and security.

Performance Measure: Complete design and construction of the following projects by June 30, 2018:

a. Replace two (2) overhead roll-up doors at Airfield Maintenance Shop. b. Replace roof at 485 South Rock. c. Replace carpet in sixteen (16) passenger boarding . d. Replace select locations of Administration area carpet. e. Refurbish Baggage Handling System Matrix 1 Carousel equipment.

246 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

DIRECTOR OF FACILITES AND MAINTENANCE Section 601

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $391,064 $449,600 $413,400 -8% Vacation Pay 41130 42,963 9,100 3,300 -64% Sick Leave 41140 23,183 13,900 8,700 -37% Holiday Pay 41150 24,835 0 0 0% Comp Time 41160 568 0 0 0% Medicare 41320 7,105 7,842 6,000 -23% Group Insurance 41340 31,749 35,800 40,600 13% Disability Insurance 41342 4,714 5,200 4,700 -10% Vision Insurance 41344 362 500 500 0% Dental Insurance 41347 2,951 3,000 3,000 0% Workers Comp 41350 376 400 400 0% Retirement 41360 120,511 125,900 115,800 -8% Accrued PERS Expense 41365 6,082 0 0 0%

TOTAL PERSONNEL SERVICES 656,463 651,242 596,400 -8%

PURCHASED SERVICES Professional Services 43100 1,500 5,000 5,000 0% Office Equipment Rental 43210 759 850 800 -6% Repairs 43310 0 100 0 -100% Contracted Services 43340 14,714 30,000 0 -100% Other Repair/Maintenance Svcs 43390 76 12,000 20,000 67% Freight Expense 43430 0 1,000 250 -75% Other Purchased Services 43490 32 0 0 0%

TOTAL PURCHASED SERVICES 17,080 48,950 26,050 -47%

MATERIALS & SUPPLIES Office Supplies 44100 19,330 14,000 18,000 29% Paper 44110 61 0 0 0% Postage 44120 68 50 50 0% Printing & Forms 44130 0 150 150 0% Other Repairs-Maint Supplies 44390 40 100 50 -50% Office Small Equipment 44410 974 500 500 0% Sign and Sign Maintenance 44430 23,735 20,000 20,000 0% Employee Safety Equipment 44450 39 0 0 0%

TOTAL MATERIALS & SUPPLIES 44,248 34,800 38,750 11%

ADMINISTRATIVE EXPENSE Membership Dues 45110 1,081 1,115 880 -21% Books & Subscriptions 45120 235 2,300 400 -83% Conference Registration Fees 45130 1,079 900 2,350 161% Training Expense 45140 229 2,100 3,395 62% Travel & Reimbursed Expense 45210 648 2,760 3,905 41%

TOTAL ADMINISTRATIVE EXPENSES 3,272 9,175 10,930 19%

TOTAL EXPENSES BEFORE FIXED ASSETS 721,064 744,167 672,130 -10%

247 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

DIRECTOR OF FACILITES AND MAINTENANCE Section 601

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE FIXED ASSETS Fixed Asset Acquisition 48150 0 47,176 0 -100%

TOTAL DEPARTMENT EXPENSES $721,064 $791,343 $672,130 -15%

248 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Airfield Maintenance

Mission Statement: To provide operational effectiveness and efficiency for the management and maintenance of airfield pavement, markings and lighting, the RNO landscapes and additional airport properties. Through innovation and technology, Airfield Maintenance also maintains RNO’s extensive vehicle and equipment fleets and is responsible for the execution of the snow removal work plan.

Key Duties and Responsibilities:

 Maintain all RNO vehicles and equipment to improve fuel efficiency, lower maintenance costs, and enhance overall value.  Procure new snow removal equipment to upgrade the aging fleet.  Support other RNO and RTS department maintenance needs.  Maintain airfield pavements and markings in accordance with FAR Part 139 and other applicable regulations.  Maintain all airfield lighting equipment and navigational aids (NAVAIDS).  Perform all RNO airfield snow removal operations.  Maintain landside pavement and markings.  Maintain safe and accurate signage for the traveling public.  Ensure all areas of RNO are clean and free of all Foreign Object Debris (FOD).  Support RTAA wide recycling.  Maintain all RNO landscaping, manage airfield weed abatement program, and maintain all acquired properties for appearance, weed control and dust abatement.  Assist RTS staff with pavement maintenance and airfield markings in support of National Championship Air Races.  Maintain at all times the airfield lighting system to 99% of operational requirements and airfield ramp and landside parking lighting to 95% operational requirements,  Maintain all airport emergency generators and electrically operated perimeter gates.  Fog seal twenty (20%) of asphaltic concrete pavement at RNO and RTS annually. Repair cracks and spalls in pavement as required; replace joint sealants in areas of identified failure.  Maintain Aircraft Operations Area markings to 100% compliance with Part 139.  Perform rubber removal as needed per FAA Advisory Circulars.  Patch and seal cracks in five percent (5%) of roadways and parking lots annually.  Maintain roadway and crosswalk markings as required, including the new long term parking walkway.  Efficient removal of snow and ice as needed from aircraft, vehicle, and passenger movement areas.  Sweep all landside roads, parking areas, perimeter roads and ramps as needed.

249 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

 Maintain the storm drain system free of debris for proper drainage.  Provide trash pickup from dumpster twice every day and dispose of pallets daily.

FY 2017-18 New Initiatives

1. Conduct a Water Use Audit and develop a Water Use Reduction Plan.

Strategic Initiative/Guiding Principle: Environmental Responsibility and Financial Integrity.

Description: Living in a high-desert climate with an average annual rainfall of seven inches per year and Lake Tahoe serving as our primary water source, water is a precious and limited resource. This initiative will evaluate the RTAA water use and make recommendations on ways to reduce its use.

Performance Measure: Complete the audit and plan by June 30, 2018.

250 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

AIRFIELD MAINTENANCE Section 602

ACCOUNT 2013-14 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $1,070,081 $1,313,100 $1,389,400 6% Temporary Employees 41120 47,040 52,200 53,500 2% Vacation Pay 41130 94,604 6,900 6,800 -1% Sick Leave 41140 52,505 14,800 16,300 10% Holiday Pay 41150 60,609 3,000 3,000 0% Workers Comp Pay 41170 0 0 700 % Overtime Pay 41210 27,497 42,000 60,000 43% Overtime Call Back 41213 16,919 30,000 30,000 0% Standby 41220 5,639 14,250 14,250 0% Shift Differential 41230 9,247 11,000 11,000 0% Holiday worked Pay 41280 14,102 18,000 18,000 0% Medicare 41320 16,331 19,000 20,100 6% Group Insurance 41340 230,901 273,700 286,000 4% Disability Insurance 41342 10,163 11,700 12,200 4% Vision Insurance 41344 4,940 4,300 3,900 -9% Dental Insurance 41347 29,077 26,600 23,600 -11% Workers Comp 41350 42,053 47,400 47,800 1% Retirement 41360 323,426 367,700 389,000 6% Uniform Allowance 41380 9,906 12,500 13,000 4% Meal Allowance 41390 523 900 900 0%

TOTAL PERSONNEL SERVICES 2,082,084 2,269,050 2,399,450 6%

UTILITIES AND COMMUNICATIONS Electricity 42110 103,336 100,000 70,000 -30% Natural Gas 42120 21,624 22,000 22,000 0% Water 42130 2,465 3,000 3,000 0% Solid Waste Disposa 42150 71,315 44,000 48,000 9% Recycleable Disposa 42151 1,418 3,000 2,000 -33% Dump Fees 42152 5,734 10,000 12,000 20% Sumps/Oil-Water Seperators 42153 9,440 13,000 15,375 18% Propane 42170 2,043 1,950 1,950 0% Hazardous Waste Disposa 42180 2,222 3,500 3,500 0%

TOTAL UTILITIES & COMMUNICATIONS 219,598 200,450 177,825 -11%

PURCHASED SERVICES Office Equipment Renta 43210 1,665 2,500 2,500 0% Equipment Renta 43211 3,343 2,500 2,500 0% Contracted Services 43340 34,480 58,750 79,906 36% Other Repair/Maintenance Svcs 43390 30,203 36,000 36,000 0% Freight Expense 43430 3,473 5,500 5,500 0% Permits & Recorders Fees 43460 933 2,400 2,400 0%

TOTAL PURCHASED SERVICES 76,989 107,650 128,806 20%

MATERIALS & SUPPLIES Office Supplies 44100 3,480 3,500 4,000 14% Paper 44110 130 200 200 0% Postage 44120 0 15 15 0% Printing & Forms 44130 169 400 400 0% Oil and Lubricants 44210 14,144 15,500 15,500 0% Herbicides 44221 62,212 65,500 71,000 8%

251 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

AIRFIELD MAINTENANCE Section 602

ACCOUNT 2013-14 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE Ice Control 44223 41,545 56,000 56,000 0% Rubber Remova 44224 5,834 13,000 13,000 0% Gasoline 44230 91,389 87,000 82,000 -6% Diesel Fuel 44240 93,154 75,000 70,000 -7% Janitorial Paper Supplies 44250 0 300 0 -100% Janitorial Supplies 44260 459 300 300 0% Medical Supplies 44270 391 600 1,000 67% Trash Can Liners 44280 3,209 3,600 3,600 0% Other Operating Supplies 44290 3,242 11,500 11,500 0% Repair & Maintenance Supply 44300 20,244 20,500 20,500 0% Vehicle Maintenance Supplies 44310 33,179 55,000 55,000 0% Machinery 44330 133,786 140,000 140,000 0% Steel and Sheet Meta 44332 4,231 2,700 3,000 11% Locks & Hardware 44333 7,551 7,000 7,500 7% Seeds, Plants & Trees 44340 6,138 5,000 5,000 0% Irrigation Supplies 44341 5,611 6,500 6,500 0% Landscape Materials 44342 1,993 5,500 5,500 0% Plumbing Supplies 44350 2,363 0 0 0% Electrical Supplies 44360 11,758 14,000 14,000 0% Runway/Taxiway Lighting 44361 37,417 42,500 30,000 -29% Ramp Lighting 44362 11,443 10,000 10,000 0% Lumber & Building Supplies 44370 497 800 800 0% Paint Supplies 44380 99,572 67,500 70,000 4% Thermoplastic Markings 44381 0 80,000 80,000 0% Other Repairs-Maint Supplies 44390 161 0 0 0% Small Tools - Minor Equipmen 44400 15,582 16,000 16,000 0% Office Small Equipmen 44410 610 5,800 5,800 0% Sign and Sign Maintenance 44430 4,240 5,000 6,000 20% Employee Safety Equipmen 44450 16,019 17,000 23,000 35% Asphalt & Cement 44510 1,066 12,000 20,000 67% Back Fill/Crusher Run, Etc. 44511 1,950 2,000 4,000 100% Patch Material 44513 7,184 8,000 6,000 -25% Runways/taxiway Repai 44530 67,947 55,000 50,000 -9% Fence and Gate Repair Parts 44540 1,738 2,000 2,000 0%

TOTAL MATERIALS & SUPPLIES 811,638 912,215 909,115 0%

ADMINISTRATIVE EXPENSE Membership Dues 45110 1,544 2,238 2,153 -4% Conference Registration Fees 45130 0 910 400 -56% Training Expense 45140 7,964 12,870 13,995 9% Travel & Reimbursed Expense 45210 1,714 14,416 11,520 -20%

TOTAL ADMINISTRATIVE EXPENSES 11,223 30,434 28,068 -8%

TOTAL EXPENSES BEFORE FIXED ASSETS 3,201,531 3,519,799 3,643,264 4%

FIXED ASSETS Fixed Asset Acquisition 48150 94,390 101,530 386,015 280%

TOTAL SECTION EXPENSES $3,295,921 $3,621,329 $4,029,279 11%

252 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 7 – Expenditures

Building Maintenance

Mission Statement: Through leadership and organizational planning, deliver cost-effective facility maintenance and services responsive to RTAA tenants and the traveling public's needs.

Key Duties and Responsibilities:

 Provide preventative maintenance and services required to support RTAA owned building facilities and system components.  Maintain and inspect all regulatory controlled systems such as fire systems, elevator, escalator, locks, doors and alarms.  Perform snow removal and ice treatment of the landside areas and assisting on the airfield as required.  Provide escorts and contractor support for RTAA projects. Provide contracted services agreement management for multiple systems and equipment maintenance services.  Plan, schedule and supervise efficient cost effective facilities operations.  Provide support service for the Marketing/ Public Affairs and Airport Economic Development.  Perform inspections, maintenance and repairs to structure and system components of the RNO terminal building.  Provide utilities systems including electricity, water, natural gas and sewer.  Perform custodial services to maintain a high standard of cleanliness in the RNO terminal building and other RTAA facilities.  Improve work plans as necessary toward greater efficiency and cost reductions.  Ensure a quality passenger experience by monitoring the daily operations and maintenance of the terminal building, operating systems and equipment.  Provide management oversight for the Baggage Handling System (BHS) and all related facility contracts.  Train staff to improve maintenance effectiveness and safety awareness.  Reduce energy consumption through the installation of energy saving light fixtures and improvements to the energy management building systems.

253 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

BUILDING MAINTENANCE AND SERVICES Section 603

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $2,249,428 $2,742,900 $2,814,000 3% Vacation Pay 41130 201,288 5,400 2,500 -54% Sick Leave 41140 76,288 22,100 28,200 28% Holiday Pay 41150 133,337 32,000 32,000 0% Workers Comp Pay 41170 1,753 0 0 0% Overtime Pay 41210 9,550 6,000 6,000 0% Overtime Call Back 41213 13,066 15,000 15,000 0% Standby 41220 19,931 12,000 12,000 0% Shift Differential 41230 99,388 98,000 98,000 0% Holiday worked Pay 41280 86,762 92,000 92,000 0% Medicare 41320 41,545 39,800 41,400 4% Group Insurance 41340 542,902 640,400 739,500 15% Disability Insurance 41342 22,590 25,600 26,000 2% Vision Insurance 41344 7,466 9,800 9,800 0% Dental Insurance 41347 57,054 60,800 61,700 1% Workers Comp 41350 72,546 106,500 106,900 0% Retirement 41360 766,839 767,500 787,400 3% Accrued PERS Expense 41365 38,430 0 0 0% Uniform Allowance 41380 15,503 20,000 20,000 0% Meal Allowance 41390 212 1,000 1,000 0%

TOTAL PERSONNEL SERVICES 4,455,879 4,696,800 4,893,400 4%

UTILITIES AND COMMUNICATIONS Electricity 42110 923,757 1,200,000 1,000,000 -17% Natural Gas 42120 335,687 290,000 330,000 14% Water 42130 87,272 111,000 110,000 -1% Sewer 42140 74,110 82,000 78,000 -5% Solid Waste Disposa 42150 31,378 47,000 47,000 0%

TOTAL UTILITIES & COMMUNICATIONS 1,452,204 1,730,000 1,565,000 -10%

PURCHASED SERVICES Office Equipment Renta 43210 3,749 3,800 3,800 0% Contracted Services 43340 530,987 529,400 557,250 5% Other Repair/Maintenance Svcs 43390 600 0 0 0% Freight Expense 43430 4,084 5,000 5,000 0% Permits & Recorders Fees 43460 7,221 9,000 9,000 0% Other Purchased Services 43490 34,193 50,000 50,000 0%

TOTAL PURCHASED SERVICES 580,834 597,200 625,050 5%

MATERIALS & SUPPLIES Office Supplies 44100 4,745 3,000 3,500 17% Paper 44110 129 500 400 -20% Printing & Forms 44130 693 1,000 1,000 0% Chemicals 44220 235 0 0 0% Ice Control 44223 22,527 20,000 20,000 0% Janitorial Paper Supplies 44250 71,036 64,000 66,000 3% Janitorial Supplies 44260 53,630 45,000 48,000 7% Medical Supplies 44270 521 2,000 1,000 -50% Trash Can Liners 44280 28,131 26,000 28,000 8% Other Operating Supplies 44290 124 0 0 0% Repair & Maintenance Supply 44300 29 0 0 0% Heating & Air Conditioning 44320 55,451 48,000 50,000 4%

254 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

BUILDING MAINTENANCE AND SERVICES Section 603

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE Filters 44321 2,557 0 0 0% Machinery 44330 4,025 4,000 4,000 0% Baggage Conveyors 44331 5,586 25,000 25,000 0% Locks & Hardware 44333 8,746 10,000 10,000 0% Brushes 44334 1,623 3,000 2,000 -33% Jet Bridge Repair 44336 50,270 30,000 30,000 0% Plumbing Supplies 44350 29,736 28,000 30,000 7% Electrical Supplies 44360 37,654 35,000 50,000 43% Lumber & Building Supplies 44370 7,235 15,000 15,000 0% Paint Supplies 44380 1,817 3,000 3,000 0% Small Tools - Minor Equipmen 44400 9,332 5,000 8,000 60% Sign and Sign Maintenance 44430 1,145 0 0 0% Employee Safety Equipmen 44450 5,833 10,000 8,000 -20%

TOTAL MATERIALS & SUPPLIES 402,809 377,500 402,900 7%

ADMINISTRATIVE EXPENSE Membership Dues 45110 1,441 3,595 3,600 0% Books & Subscriptions 45120 0 500 500 0% Conference Registration Fees 45130 1,610 1,800 2,000 11% Training Expense 45140 2,988 3,000 4,000 33% Meeting Expense 45150 317 0 0 0% Travel & Reimbursed Expense 45210 2,618 3,200 3,200 0%

TOTAL ADMINISTRATIVE EXPENSES 8,974 12,095 13,300 10%

TOTAL EXPENSES BEFORE FIXED ASSETS 6,900,700 7,413,595 7,499,650 1%

FIXED ASSETS Fixed Asset Acquisition 48150 5,021 140,611 99,590 -29%

TOTAL SECTION EXPENSES $6,905,721 $7,554,206 $7,599,240 1%

255 Reno-Tahoe Airport Authority FY 2017-18 A N N U A L B U D G E T

Baggage Handling System Section 604; Activity Code 250

ACCOUNT 2015-16 2016-17 2017-18 PERCENT NO. ACTUAL BUDGET BUDGET CHANGE PERSONNEL SERVICES Permanent Employees 41110 $39,480 $39,600 $41,600 5% Group Insurance 41340 5,526 6,900 7,800 13% Retirement 41360 10,980 11,100 11,700 5% Accrued PERS Expense 41365 569 0 0 0%

TOTAL PERSONNEL SERVICES 56,555 57,600 61,100 6%

UTILITIES AND COMMUNICATIONS Electricity 42110 352,765 440,000 410,000 -7% Natural Gas 42120 20,852 25,000 25,000 0%

TOTAL UTILITIES & COMMUNICATIONS 373,618 465,000 435,000 -6%

PURCHASED SERVICES Consultants - General 43140 0 7,500 0 -100% Other Professional Services 43190 29,630 31,055 30,000 -3% Contracted Services 43340 859,417 874,887 892,385 2% Freight Expense 43430 12 0 0 0%

TOTAL PURCHASED SERVICES 889,059 913,442 922,385 1%

MATERIALS & SUPPLIES Heating & Air Conditioning 44320 5,752 10,000 10,000 0% Baggage Conveyors 44331 55,275 55,000 55,000 0% Electrical Supplies 44360 3,624 5,000 5,000 0%

TOTAL MATERIALS & SUPPLIES 64,651 70,000 70,000 0%

FIXED ASSETS Fixed Asset Acquisition 48150 19,420 0 0 0%

TOTAL SECTION EXPENSES $1,403,303 $1,506,042 $1,488,485 -1%

256 









   Section 8 – Capital Budget Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Property, Plant and Equipment

The schedule following this narrative lists the approved Property, Plant and Equipment (PP&E) submittals from the RTAA’s various departments/sections in the adopted FY 2017-18 Budget. A PP&E item is an asset with a useful life exceeding one year and a cost greater than $5,000.

The total PP&E request for FY 2017-18 is $1,091,876. This is an increase of $567,019, or 104.1% above the FY 2016-17 PP&E Budget.

The major PP&E requests consist primarily of computer server replacement, security and badging system upgrades, interactive employee training system, an asphalt crack sealing machine, seven (7) vehicles, an air sweeper and a floor scrubber.

The vehicles requested consist of two sport utility vehicles that will be used by Marketing and Public Affairs and Airport Police, and five trucks for the Reno-Stead Airport and Airfield Maintenance and Building Maintenance departments. All vehicles meet the replacement requirement set through the Facilities vehicle replacement plan.

The Facilities Department’s vehicle replacement plan maximizes the functionality, and minimizes the maintenance costs of the Authority’s fleet of vehicles. The plan provides for the retirement and rotation of vehicles and equipment. The evaluation criteria are listed below.

VEHICLE AND EQUIPMENT ACQUISITION AND ROTATION POLICY REPLACEMENT EVALUATION CRITERIA

Light Duty Vehicles . Replacement evaluation after 6 years of service or . Replacement evaluation when vehicle exceeds 80,000 miles or . Replacement evaluation when maintenance cost to purchase ratio exceeds 35%

Heavy Duty Vehicles and Equipment . Replacement evaluation after 10-20 years depending on type of vehicle/equipment or . Replacement evaluation when vehicle/equipment exceeds 80,000 miles or . Replacement evaluation every 25,000 hours on Hobbs hour meter or . Replacement evaluation when maintenance cost to purchase ratio exceeds 30%

The schedules below summarize all technology, vehicles and the major piece of equipment with a unit cost greater than $30,000.

257 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Property, Plant and Equipment

Technology

Department FY 2017-18 Request Amount Current Equipment Being Budgeted Replaced/Explanation Technology and Virtual Computing $124,000 This program will replace Information Infrastructure, Phase I approximately one-third of our Systems virtual computing infrastructure. Airport Security Identity Management $131,000 This software will enable the System consolidation of data entry in the RTAA Badging Office from three systems into a single entry. Airport Security Interactive Employee $74,570 This system will transition from a Training standalone application to a web- based training system. This upgrade allows the update of course content more cost effectively and will streamline the renewal training process.

Vehicles

Department FY 2016-17 Request Amount Current Equipment Being Budgeted Replaced/Explanation Marketing and 4WD Sport Utility $45,750 This vehicle is to replace a 2003 Public Affairs Vehicle Chevrolet Suburban with over 41,000 miles. This request qualifies under the replacement criteria. Reno-Stead Standard Cab 4WD $35,659 This vehicle is to replace a 1994 Airport Truck Chevrolet 1500 Truck with over 96,000 miles. This request qualifies under the replacement criteria. Airport Police 4WD Sport Utility $58,925 This vehicle is to replace a 2011 Vehicle Chevrolet Caprice with over 75,000 miles. This request qualifies under the replacement criteria. Airfield Standard Cab 4WD $52,440 This vehicle is to replace a 1994 Maintenance Truck with 8’ Stake Chevrolet 3500 Truck with over Bed 46,000 miles. This request qualifies under the replacement criteria. Airfield Standard Cab 4WD $51,075 This vehicle is to replace a 2008 Maintenance Truck with 8’ Dump Dodge 3500 Dump Truck with over Body 69,000 miles. This request qualifies under the replacement criteria.

258 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Property, Plant and Equipment

Department FY 2016-17 Request Amount Current Equipment Being Budgeted Replaced/Explanation

Building Standard Cab 4WD $38,800 This vehicle is to replace a 1998 Maintenance Truck GMC 3500 Utility Truck with over 70,000 miles. This request qualifies under the replacement criteria. Building Standard Cab 4WD $36,810 This vehicle is to replace a 2002 Maintenance Truck with 8’ Stake Dodge 2500 Truck with over 65,000 Bed miles. This request qualifies under the replacement criteria.

Equipment

Department FY 2016-17 Request Amount Current Equipment Being Budgeted Replaced/Explanation Reno-Stead Crack Sealing Machine $70,000 This equipment will be used in the Airport sealing of random cracks in asphalt pavements. The current machine is becoming very unreliable with daily repairs needed to keep it operational. Airfield Regenerative Air $282,500 This equipment is used by airfield Maintenance Sweeper staff daily in the removal of Foreign Object Debris and trash. The current sweeper is 24 years old and has reached the end of its useful life.

259 Reno-Tahoe Airport Authority Property, Plant, and Equipment

Division Description Amount Total

101 Board of Trustees Board Room Furniture $ 19,450 19,450

203 Marketing and Public Affairs 4WD Sport Utility Vehicle $ 45,750 $ 45,750

252 Human Resources Training Room Furniture $ 9,650 $ 9,650

253 Technology & Information Systems

Public Address System $ 17,767 Virtual Computing Infrastructure Replacement, Phase I 124,000

$ 141,767

254 Reno‐Stead Airport Crack Sealing Machine $ 70,000 Standard Cab 4WD Truck 35,659 $ 105,659

404 Airport Rescue & Fire Vehicle Exhaust System Improvements $ 19,500 $ 19,500

405 Airport Police 4WD Sport Utility Vehicle $ 58,925 58,925

407 Airport Security Identity Management System $ 131,000 Interactive Employee Training 74,570 205,570

602 Airfield Maintenance Tymco 600 Regenerative Air Sweeper 282,500 Standard Cab 4WD Truck with 8' Stake bed 52,440 Standard Cab 4WD Truck with 8' Dump Body 51,075 $ 386,015

603 Building Maintenance Standard Cab 4WD Truck 38,800 Standard Cab 4WD Truck with 8' Stake bed 36,810 Tennant Model T-12 Floor Scrubber 23,980 $ 99,590

TOTAL $ 1,091,876

260 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

Capital Projects (Internally Generated Funding or Rental Car Customer Facility Charges)

The capital projects shown on the schedule following this page are the result of the FY 2017- 18 budget process and the RTAA’s on-going capital improvement program.

The summary schedule outlines the approved capital projects along with the project administrator, the cost estimate, and the cost center assigned to the project for airline rate setting purposes. Following this summary schedule, a narrative is provided that further explains the nature of the project along with the financial impact on airline rates and the estimated operating revenue and expense impact over the next three years.

The airline agreement specifies a process for the airlines to review and disapprove, if costs exceed established limits, the capital projects or capital project's debt service to be included in the Airfield, Terminal Building and Baggage Handling System (BHS) cost centers.

The cost centers defined in the airline agreement are Airfield, Terminal Building, Ground Transportation, Baggage Handling System (BHS), Other, and Reno-Stead Airport.

Under the agreement, the first $1 million of projects in the Airfield Cost Center, $2 million in the Terminal Building Cost Center, $500,000 in the BHS Cost Center are not subject to the Majority-In-Interest (MII) airline disapproval process. For a full description of the MII process, see Section 5 Financial Plan - Airline Agreement. Projects over $300,000 must be amortized over their useful life and not reimbursed in one year’s rates.

Under the net revenue sharing formula as defined in the airline agreement, capital project costs that are not recovered through airline rates and charges, whether amortized over the useful life or reimbursed in one year, reduce net available revenues subject to the 50%/50% revenue sharing credit. This credit is applied against the signatory airline terminal rental rate.

While the monetary value of the projects in the Airfield, and Terminal Building cost centers for the FY 2017-18 Budget are below the limits subject to airline disapproval, staff reviewed and discussed these projects with the airlines during the annual budget review meeting.

During the budget process all capital projects are prioritized and evaluated based on the following five criteria:

1. Required for safety or security 4. Generates a source of revenue or is 2. Mandated by a regulatory agency fundamental to the basic operations of 3. Prevents damage to or the the airports maintenance of an existing facility 5. Impacts or improves any of the RTAA’s other areas

261 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

These capital projects are funded in several ways. The smaller capital projects are funded by airline rates through airline cost center recovery or non-airline revenues in the fiscal year.

The General Purpose Fund, as further discussed in Section 5 Financial Plan - Trust Funds Summary, is used to finance the larger operating budget capital projects.

262 FY 2017-18 Capital Project Budgets COST CENTER Other Funding Sources AIP Grant, PFC, Fuel Tax Project Administrator Terminal Ground Reno-Stead General Funds, CFC, or Item (Amortization Years) Estimate Airfield Building BHS Transportation Other Airport Purpose Fund Special Fund Other Reno-Tahoe International Airport Mini Warehouse Asphalt Rehabilitation - "CC" Commercial 1 Building Economic Development $ 200,000 200,000 2 GA West Asphalt Replacement South T-Hangar Row Economic Development 218,600 218,600 3 Air Cargo Way Drainage Repair Economic Development 86,000 86,000 4 Roof Replacement- 1551 National Guard Way (Hertz) Economic Development 67,775 67,775 5 Ready Return Carwash Equipment Replacement Economic Development 635,000 635,000 6 Communications Line Relocation Tech. Information 190,000 190,000 7 SCAN Sensor Replacement Operations 20,900 20,900 8 Camera Replacement Project, Phase II Operations 79,000 79,000 9 CCTV Camera Installation, Phase IV Operations 90,000 90,000 10 Landside Operations Office Remodel Operations 23,775 23,775 11 Access Road Reconstruction - Gate 170 Engineering 266,000 266,000 12 Airfield Pavement Management Program Engineering (5) 617,500 123,500 494,000 13 Landside Pavement Management Program Engineering (5) 600,000 120,000 480,000 14 Purchasing Office Relocation and EOC Remodel Engineering 85,000 85,000 15 Roof Replacement - 485 South Rock Facilities 64,000 64,000 16 Administration Carpet Replacement Facilities 225,000 225,000 17 Airfield Maintenance Shop Door Replacement Facilities 16,500 16,500 16,500 18 Building Control System Upgrade, Phase II Facilities 185,000 185,000 185,000 19 LED Lighting Replacement in Parking Structure Facilities 53,000 53,000 20 Jet Bridge Carpet Replacement Facilities 70,000 70,000 21 Baggage Handling System Matrix 1 Carousel Refurbishment Facilities 160,000 160,000 263 Sub Total $ 3,953,050 505,900$ 345,000$ 160,000$ 386,775$ 1,080,100$ -$ 974,000$ -$ 702,775$

Reno-Stead Airport 22 Hangar #6 Lighting Improvements Reno-Stead 48,500 48,500 23 Window Replacement -Aviation Classics Reno-Stead 38,600 38,600 24 Wash Bay Restroom Remodel Reno-Stead 16,900 16,900 Terminal Access Road Rehabilitation Reno-Stead (10) 25 1,132,786 113,279 1,019,507 Sub Total $ 1,236,786 -$ -$ -$ -$ -$ 217,279$ -$ 1,019,507$ -$

Total $ 5,189,836 505,900$ 345,000$ 386,775$ $ 1,080,100 $ 217,279 974,000$ $ 1,019,507 $ 702,775 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

Reno-Tahoe International Airport

Mini Warehouse Asphalt Rehabilitation “CC” Commercial Building

This project consists of removing and replacing approximately 25,047 square feet of asphalt parking lot at the Mini Warehouse on the north and south side of the CC commercial building. The scope of work also includes soil excavation and stabilization. The condition of the pavement in this area is beyond its useful life with full reconstruction the only viable option.

Project Cost Construction (includes materials, equipment, labor) $200,000

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.82 Impact on Airline Cost per Enplaned Passenger $0.05

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/(Savings) Fiscal Year 2017-18 $(10,000) Fiscal Year 2018-19 $(10,000) Fiscal Year 2019-20 $(10,000)

General Aviation (GA) West Asphalt Replacement South T-Hangar Row

This project consists of removing and replacing deteriorating asphalt on the south side of the T-hangar row at GA West. This project will require asphalt removal, compact base and re-pavement. The asphalt has deteriorated into gravel causing a Foreign Object Debris (FOD) hazard.

This project is needed to maintain these hangars in a rentable condition.

264 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

Project Cost Construction (includes materials, equipment, labor) $218,600

Rate Impact (excluding potential revenue) Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.90 Impact on Airline Cost per Enplaned Passenger $0.06

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/(Savings) Fiscal Year 2017-18 $(10,000) Fiscal Year 2018-19 $(10,000) Fiscal Year 2019-20 $(10,000)

Air Cargo Way Drainage Repair

The AA/BB commercial building at the Mini-Warehouse Complex is the largest and most profitable commercial building. Along the west side of the building along Air Cargo Way, there is not adequate drainage. During winter months, standing water and ponding is consistent in the area directly to the west of the building designated for tenant parking.

This project consists of the placement of a concrete valley gutter, patching of asphalt concrete, and construction of a sidewalk drain between the Mini Warehouse and the Federal Express Parking Lot (1350 Air Cargo Way).

Project Cost Construction (includes materials, equipment, labor) $86,000

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.36 Impact on Airline Cost per Enplaned Passenger $0.02

265 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/(Savings) Fiscal Year 2017-18 $(5,000) Fiscal Year 2018-19 $(5,000) Fiscal Year 2019-20 $(5,000)

Roof Replacement – 1551 National Guard Way

The RTAA owns five service and storage facilities leased to the on-airport rental car companies serving RNO. The service facility at 1670 National Guard Way is currently under lease to the Hertz Corporation. This project consists of removing and replacing 7,248 SF of un-ballasted single-ply membrane, rubber/plastic roofing and 2” insulation with mechanically attached single ply roofing.

This project is being funded using Customer Facility Charge (CFC) revenues and does not impact the airline rates and charges. CFC’s were adopted effective August 1, 2012 and are collected in the amount of $1.25 per car rental transaction day. In addition, the rental car companies are responsible for the on-going, day-to-day maintenance costs associated with this project.

Project Cost Construction (includes materials, equipment, labor) $67,775

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.00 Impact on Airline Cost per Enplaned Passenger $0.00

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

266 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

Additional O&M Expense/(Savings) Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Ready Return Carwash Equipment Replacement

This rental car project consists of removing and replacing the aging carwash equipment in all five bays. The aging equipment is requiring more extensive repairs and experiencing longer downtime, which is resulting in higher operating expenses.

This project is being funded using Customer Facility Charge (CFC) revenues and does not impact the airline rates and charges. CFC’s were adopted effective August 1, 2012 and are collected in the amount of $1.25 per car rental transaction day.

While the rental car companies are responsible for the on-going, day-to-day maintenance costs associated with this project, CFC funding is used to reimburse the rental car companies’ property management firm responsible for this maintenance.

Project Cost Construction (includes materials, equipment, labor) $635,000

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.00 Impact on Airline Cost per Enplaned Passenger $0.00

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/(Savings) Fiscal Year 2017-18 $(32,000) Fiscal Year 2018-19 $(32,000) Fiscal Year 2019-20 $(32,000)

267 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

Communications Line Relocation

This project consists of design and construction to relocate the existing telecommunications line in the North Ground Transportation Center (GTC). The existing duct bank and copper cables were previously installed in the 1980’s with limited ground cover due to other existing utilities and subsurface obstructions. Additional cables have been installed in this duct bank, including fiber optic and pressurized copper cables.

This project will replace the cables and reroute them via new duct bank sections through the North GTC.

Project Cost Construction (includes materials, equipment, labor) $190,000

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.78 Impact on Airline Cost per Enplaned Passenger $0.05

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/ (Savings) Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

SCAN Sensor Replacement

This project consists of replacing four runway pavement sensors that currently are not working. These sensors monitor pavement temperatures and provide critical information to operations and airfield maintenance during snow events. The sensors in question are over 20 years old and are well past their intended life of 10-15 years.

268 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

Project Cost Construction (includes materials, equipment, labor) $20,900

Rate Impact Impact on Landing Fee Rate $0.01 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.03 Impact on Airline Cost per Enplaned Passenger $0.01

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/ (Savings) Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Camera Replacement Project, Phase II

This project consists of the purchase, integration, and installation of seventeen (17) cameras at various locations. These cameras will replace aging equipment allowing improved visibility in safety and/or security sensitive locations.

Project Cost Construction (includes materials, equipment, labor) $79,000

Rate Impact Impact on Landing Fee Rate $0.02 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.09 Impact on Airline Cost per Enplaned Passenger $0.03

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

269 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

Additional O&M Expense/ (Savings) Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Closed Circuit Television (CCTV) Camera Installation, Phase IV

This project consists of the continuing purchase, integration, and installation of High Definition CCTV cameras for various locations. These cameras will either provide much improved visibility or will provide for visibility for the first time of safety and/or security sensitive locations.

Project Cost Construction (includes materials, equipment, labor) $90,000

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.53 Impact on Airline Cost per Enplaned Passenger $0.03

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/(Savings) Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Landside Operations Office Remodel

With additional supervisory staff included in the FY 2017-18 Budget, the Landside administrative offices are not suitable to provide additional office space without some new construction. Shared office space is not conducive to the need for privacy and functionality.

270 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

This project consists of building a new interior wall, roughly 25 linear feet, in the maintenance room to accommodate a new count room, moving existing proximity card access readers, new electrical, new carpeting, one new door, new work station, and painting of three offices.

Project Cost Construction (includes materials, equipment, labor) $23,775

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.10 Impact on Airline Cost per Enplaned Passenger $0.00

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/(Savings) Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Access Road Reconstruction – Gate 170

This project consists of the reconstruction of the existing Gate 170 Access Road. The existing asphalt pavement has deteriorated to a point where additional repair and maintenance are ineffective. This roadway is the primary access point for emergency response vehicles entering and exiting the Air Operations Area (AOA).

Project Cost Construction (includes materials, equipment, labor) $266,000

Rate Impact Impact on Landing Fee Rate $0.09 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.01 Impact on Airline Cost per Enplaned Passenger $0.11

271 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/(Savings) Fiscal Year 2017-18 $(10,000) Fiscal Year 2018-19 $(10,000) Fiscal Year 2019-20 $(10,000)

Airfield Pavement Management Program

This annual project reviews the condition of the airfield pavements and maintains or replaces them as necessary. The recurring maintenance project in FY 2017-18 consists of concrete panel replacement, crack repair, spall repair, and joint sealing in Runways, Taxiways and Aprons. Repair areas are identified and quantified per 2016 Airfield Pavement inspections. These improvements are considered maintenance and are not eligible for FAA Airport Improvement Program (AIP) grant funding.

Project Cost Construction (includes materials, equipment, labor) $617,500

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.51 Impact on Airline Cost per Enplaned Passenger $0.03

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/(Savings) Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

272 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

While this project does not generate any easily measurable revenue or O&M expense savings, the on-going effort to preserve airfield pavement enhances both aircraft safety and extends the useful life of the pavement.

Landside Pavement Management Program

This annual project reviews the condition of the landside pavements and maintains or replaces them as necessary. The maintenance program in FY 2017-18 consists of a combination of pavement repairs, overlay, and reconstruction of the Phase 2 portion of the Ground Transportation Lot. Repair and reconstruction areas are defined per 2016 Landside Pavement inspections.

Project Cost Construction (includes materials, equipment, labor) $600,000

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.50 Impact on Airline Cost per Enplaned Passenger $0.03

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/(Savings) Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

While this project does not generate any easily measurable revenue or O&M expense savings, the on-going effort to preserve airfield pavement enhances both aircraft safety and extends the useful life of the pavement.

Purchasing Office Relocation and Emergency Operations Center (EOC) Remodel

The existing Purchasing offices are located in a modular trailer that was meant to serve as temporary office space. This project involves modifying the existing EOC and management offices to provide for the Purchasing Department to be inside a permanent structure for additional safety and security.

273 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

Project Cost Construction (includes materials, equipment, labor) $85,000

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.35 Impact on Airline Cost per Enplaned Passenger $0.02

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/(Savings) Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Roof Replacement – 485 South Rock Blvd

This roof was installed in early 1990’s. This roof has been identified by RTAA staff as needing replacement in their 2015 facility assessment survey. This project consists of removing and replacing 4,009 sq. ft. an older Asphalt Hot Bitumen built up roof, which has not held up to the ultra-violet (UV) rays and weather in this climate.

Project Cost Construction (includes materials, equipment, labor) $64,000

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.27 Impact on Airline Cost per Enplaned Passenger $0.02

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

274 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

Additional O&M Expense/(Savings) Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Administration Carpet Replacement

The existing carpet, which was replaced in 2004, has come to the end of its useful life. Wear patterns are starting to show, especially on the stairs. The new carpet will be installed using squares. This project will enable facilities maintenance crews to change out the worn/stained/damaged carpet as needed, without re-carpeting the entire area.

Project Cost Construction (includes materials, equipment, labor) $225,000

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.93 Impact on Airline Cost per Enplaned Passenger $0.06

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/(Savings) Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Airfield Maintenance Shop Door Replacement

The Airfield Maintenance Facility was constructed in 1978 using 12-foot high shop doors. The 12-foot height of the original doors was adequate for the equipment being used 39 years ago, but the more modern fleet now in service contains many pieces of equipment over 13 feet tall. This equipment includes ARFF trucks, snow removal equipment and other critical heavy equipment such as garbage trucks and paint stripers.

275 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

This project consists of removing and replacing two existing 12-foot high mechanics shop doors with 14-foot doors. Dimensions of new doors are 14’ wide x 14’ high.

Project Cost Construction (includes materials, equipment, labor) $16,500

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.07 Impact on Airline Cost per Enplaned Passenger $0.00

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/(Savings) Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Building Control System Upgrade, Phase II

This project will replace a portion of the aging pneumatic control system, which has reached the end of its useful life, in the Baggage Claim and Administrative areas to direct digital controls. This equipment provides area temperature zone control and monitoring. This project will include replacing the controls for the air handlers and associated Variable Air Volume (VAV) units and multi-zone units and valve actuators.

Project Cost Construction (includes materials, equipment, labor) $185,000

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $1.10 Impact on Airline Cost per Enplaned Passenger $0.07

276 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/(Savings) Fiscal Year 2017-18 $(18,500) Fiscal Year 2018-19 $(18,500) Fiscal Year 2019-20 $(18,500)

Light-Emitting Diode (LED) Lighting Replacement in Parking Structure

This project consists of replacing 108 existing 250-watt fixtures that are mounted on light poles located on the 3rd floor of the Parking Structure with LED Light Fixtures. By replacing the existing Metal-Halide light fixtures on the third floor of the parking structure with state of the art LED fixtures this will reduce electrical utility costs as well as increasing the lighting in that area.

Project Cost Construction (includes materials, equipment, labor) $53,000

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.22 Impact on Airline Cost per Enplaned Passenger $0.01

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/(Savings) Fiscal Year 2017-18 ($9,000) Fiscal Year 2018-19 ($9,000) Fiscal Year 2019-20 ($9,000)

277 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

Jet Bridge Carpet Replacement

The carpet currently in the Jet Bridges is over 15 years old and is badly worn. This project will replace the carpet in seventeen (17) bridges of approximately 1,300 square yards on both the B and C concourses. The carpet will be a commercial grade carpet with a level loop and will be glued down with a commercial carpet adhesive and carpet transition strips. This will also include take up and disposal of the current direct glue carpet, minor floor preparation, and installing new 4” carpet wall base.

Project Cost Construction (includes materials, equipment, labor) $70,000

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.42 Impact on Airline Cost per Enplaned Passenger $0.03

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/(Savings) Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Baggage Handling System Matrix 1 Carousel Refurbishment

This project will refurbish the in Matrix 1 behind ticket counters in the Terminal Building due to extensive component failures and excessive wear on critical drive components. A catastrophic failure of this carousel will impact the screening operation of passenger bags and possibly result in flight delays and customer bags missing their flight. Contingency plans to relocate the bag screening operations of impacted airlines will require the manual movement of bags.

278 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

Project Cost Construction (includes materials, equipment, labor) $160,000

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.00 Impact on Baggage Handling System Rate $0.05 Impact on Airline Cost per Enplaned Passenger $0.00

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/(Savings) Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Reno-Stead Airport (RTS)

Hangar #6 Lighting Improvements

This RTS project will replace fifty-eight (58) 1000 watt sodium vapor hangar bay light fixtures with 250 watt LED fixtures in Hangar #6. This project will provide better lighting and generate energy savings.

Project Cost Construction (includes materials, equipment, labor) $48,500

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.20 Impact on Airline Cost per Enplaned Passenger $0.01

Additional Revenue Fiscal Year 2017-18 $0

279 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/(Savings) Fiscal Year 2017-18 ($7,650) Fiscal Year 2018-19 ($8,000) Fiscal Year 2019-20 ($8,400)

Window Replacement – Aviation Classics

At the Aviation Classic Hangar, the window framing and flashing has twisted wood that is separated from the building. This problem has caused leaks and damage to the structure and interior finishes. This project will remove existing trim and flashing from sixty-one (61) - 1st and 2nd floor windows and install new metal flashing, caulking, new wood trim and paint.

Project Cost Construction (includes materials, equipment, labor) $38,600

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.16 Impact on Airline Cost per Enplaned Passenger $0.01

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/(Savings) Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

280 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

Wash Bay Restroom Remodel

While the existing restrooms have been maintained, the facility is twenty-five (25) years old and needs to be remodeled. This project will install a new metal roof, flooring, water & space heaters and interior finishes, along with new access control locks.

Project Cost Construction (includes materials, equipment, labor) $16,900

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.07 Impact on Airline Cost per Enplaned Passenger $0.00

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/(Savings) Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Terminal Access Road Rehabilitation

This road system that provides the primary access corridor to the new Stead /EOC facility has asphalt pavement that is over forty years old and in a severely failed condition.

This project provides for the design and reconstruction of the existing Stead Terminal Access Road ( Ave from Maryland Avenue to Iowa Street/ Petricciani Way). The Texas Ave reconstruction work is approximately 29,200 square feet of new asphalt pavement, concrete curb and gutter and valley gutter. In addition, a portion of Florida Avenue of approximately 6,150 square feet will be reconstructed with related valley gutter and curb inlet catch basins.

In addition to the road rehabilitation, a new fifty (50) space parking lot consisting of 15,000 square feet of asphalt pavement, driveways, curb and gutter, lighting, landscaping, irrigation, and storm drain improvements will be constructed as part of this project.

281 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

Project Cost Construction (includes materials, equipment, labor) $1,132,786

Rate Impact Impact on Landing Fee Rate $0.00 Impact on Terminal Rental Rate – Lower Revenue Sharing $0.67 Impact on Airline Cost per Enplaned Passenger $0.04

Additional Revenue Fiscal Year 2017-18 $0 Fiscal Year 2018-19 $0 Fiscal Year 2019-20 $0

Additional O&M Expense/(Savings) Fiscal Year 2017-18 ($7,650) Fiscal Year 2018-19 ($8,000) Fiscal Year 2019-20 ($8,400)

CAPITAL IMPROVEMENT PROGRAM

The remainder of the Capital Improvement Program, as updated during the FY 2017-18 Budget, is a rolling three to five year program that provides for critical improvements and asset preservation. Funding sources for the projects are primarily FAA Airport Improvement Program (AIP), Passenger Facility Charges (PFC), and airport revenue debt, if applicable.

Both PFC and grant dependent projects will not be implemented until a funding source is approved and awarded by the FAA.

Airport Improvement Program (AIP)

AIP grants are offered to the RTAA by the FAA to provide funding assistance to those eligible capital projects that meet the criteria of the federal program. The objective of this FAA program is to assist in the development of a nationwide system of public use airports, to ensure the safe and secure operation of the airport and airway system, and to meet the projected needs of the public. The program not only provides funding for development projects, but also airport planning and noise compatibility programs.

282 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 8 – Capital Projects

The program is funded by aviation use fees, which are collected and deposited into the Airport and Airway Trust Fund that generates the revenues in support of the AIP. The U.S. Congress authorizes expenditures from this dedicated fund on an annual basis each year. The AIP program includes entitlement and discretionary funding. Entitlement funds are awarded to eligible sponsors through a formula based on the number of passenger boardings (enplanements) and cargo tonnage. Discretionary funds are set aside to provide the FAA with flexibility to fund various high priority programs.

The AIP Program typically funds 93.75% of eligible projects at both airports. The RTAA’s General Purpose and Special Funds are primarily used for the RTAA’s (sponsor’s) matching share of the FAA grants. However, PFC funds may be used subject to FAA approval.

During the FAA Fiscal Year of 2016, which ended September 30, 2016, the RTAA received $1.875 million of AIP grants for RNO and $20.790 million of AIP grants for RTS.

Passenger Facility Charge (PFC)

PFCs were initially authorized through the and Capacity Expansion Act of 1990. The Act allowed public agencies, which manage commercial airports, to charge each enplaning passenger a facility charge in accordance with FAA requirements. The passenger facility charge is levied on the passenger tickets, collected by the airline, and forwarded to the airport (less a handling fee charged by the airlines). The revenues collected through PFCs are to preserve or enhance safety, security, and capacity, to reduce noise, or to enhance competition.

The primary difference between AIP and PFC is that the PFC is a fee directly assessed to the passenger, it is administratively retained by the airport, and it is considered local funds versus federal funds.

In October 1993, the RTAA received approval from the Federal Aviation Administration (FAA) to impose a PFC of $3.00 per enplaned passenger. Collection began January 1, 1994. In May 2001, the PFC was increased to $4.50 per enplaned passenger with collection beginning August 1, 2001. Several FAA approved projects are being funded by the PFC collections.

As of June 30, 2017, the RTAA has received collection authority to impose and use $59,338,314 on three open FAA approved PFC applications. The FY 2017-18 Budget is forecasting PFC revenues and interest of $7.351 million.

283 CAPITAL IMPROVEMENT PROGRAM - OVERVIEW SOURCES & USES OF FUNDS BY LOCATION Reno-Tahoe Airport Authority (Escalated Dollars)

Prior FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 Total Years FY17-24 Actual Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast

USES OF FUNDS

Airside 8,308,263 6,266,437 10,431,400 33,190,719 34,144,556 18,340,200 2,736,000 19,714,000 8,130,000 141,261,576 Terminal 502,351 948,699 855,275 2,966,950 4,527,950 3,819,600 1,988,000 300,000 300,000 16,208,825 BHS - - 160,000 175,000 - - - - - 335,000 Landside 1,171,087 1,094,433 3,139,550 1,150,000 1,150,000 1,150,000 1,150,000 1,150,000 1,150,000 12,305,070 Other 3,789,807 1,068,672 568,600 750,000 970,000 3,230,000 750,000 750,000 750,000 12,627,078 Administrative 911,741 3,694,232 2,448,155 938,220 300,000 300,000 300,000 300,000 300,000 9,492,348 Stead 4,667,398 5,102,381 15,129,404 7,859,099 1,723,721 5,044,412 10,950,412 2,316,405 782,851 53,576,082

19,350,647 18,174,854 32,732,384 47,029,988 42,816,227 31,884,212 17,874,412 24,530,405 11,412,851 245,805,979

SOURCES OF FUNDS

Federal Grants -Entitlement 4,838,187 4,836,293 4,958,611 5,053,853 5,128,002 5,167,108 5,206,999 5,247,691 5,289,200 45,725,945 Federal Grants -Discretionary 6,132,450 3,423,533 14,929,653 29,253,930 22,177,395 13,998,204 5,530,151 5,764,234 1,957,675 103,167,225 Passenger Facility Charges 4,038,135 5,499,530 4,669,495 6,693,756 11,695,235 8,756,050 1,975,560 610,253 455,000 44,393,014 Operating Funds - 88,000 ------88,000 General Purpose 3,013,164 2,667,244 3,631,279 3,727,396 2,800,000 2,800,000 2,800,000 2,800,000 2,800,000 27,039,083 Customer Facility Charge 47,059 329,009 2,462,775 550,000 550,000 550,000 550,000 550,000 550,000 6,138,843 Fuel Tax Fund ------Special Fund 249,417 755,892 1,851,070 1,521,003 228,875 440,438 809,250 268,875 173,125 6,297,945 284 RTAA Grant Fund ------RTAA Flood Fund ------RTAA Conduit Fund - 297,630 ------297,630 Acquisition Fund ------Consent Degree Fund 1,032,235 277,722 229,501 230,049 236,721 172,412 177,412 189,405 187,851 2,733,308 Subordinate Lien Revenue Notes ------Senior Lien Bonds ------825,040 9,099,947 - 9,924,987

19,350,647 18,174,854 32,732,384 47,029,988 42,816,227 31,884,212 17,874,412 24,530,405 11,412,851 245,805,979 CAPITAL IMPROVEMENT PROGRAM FY2017- Five Year Plan Reno-Tahoe Airport Authority

Prior FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 Total Priority Years FY17-24 AIRSIDE No. Actual Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast

Access Road Reconstruction - Gate 170 - - 266,000 - - - - - 266,000 Airfield Maintenace Shop Large Bay Expansion (Program Study) - 25,000 ------25,000 Airfield Maintenance Shop Door Replacement - - 16,500 ------16,500 Airfield Pavement Maintenance Program (2014-15) 115,981 38,539 ------154,520 Airfield Pavement Maintenance Program (2015-16) 54,293 774,807 ------829,100 Airfield Pavement Maintenance Program (2016-17) 1,488 517,431 ------518,919 Airfield Pavement Maintenance Program (2017-18) - - 617,500 ------617,500 Airfield Pavement Maintenance Program (2019-24) - - - 850,000 850,000 850,000 850,000 850,000 850,000 5,100,000 Airfield Surface Sensor Replacement - 30,353 ------30,353 Airfield Wildlife Hazard Management - - - 550,800 3,121,200 - - - - 3,672,000 Apron Phase 18 Rehabilitation (Design) - - - - 510,000 - - - - 510,000 Apron Phase 18 Rehabilitation (Construction) - - - - - 5,590,000 - - - 5,590,000 Apron Phase 19 Rehabilitation (Design) - - - - 150,000 - - - - 150,000 Apron Phase 19 Rehabilitation (Construction) - - - - - 6,030,000 - - - 6,030,000 ARFF Vehicle #2 - 202,500 607,500 ------810,000 ARFF Vehicle #4 37,370 1,192,630 ------1,230,000 ARFF Vehicle #4- Equipment - 16,113 ------16,113 ARFF Vehicle #5 - - - - 364,800 1,459,200 - - - 1,824,000 ARFF Vehicle #8 - - - - - 59,000 236,000 - - 295,000 Camera Replacement Project, Phase II - - 79,000 ------79,000 Cargo Apron Tether- Gate 10 (Fed Ex) - 50,000 ------50,000 Cargo Security Fence (Fed Ex) - 15,000 ------15,000 CCTV Camera Installation, Phase III - 24,701 ------24,701 CLIQ Key System (Phase II) - 28,733 ------28,733 285 East Airfield Lighting Vault Replacement - - 340,000 4,210,000 - - - - - 4,550,000 Deicing Materials Storage Facility (Sand Storage) 28,006 381,994 ------410,000 De-Icing Glycol Recovery System (Design) - - - - 142,600 - - - - 142,600 De-Icing Glycol Recovery System (Construction) - - - - - 1,616,000 - - - 1,616,000 Fire House- Exhaust System Modifications - 10,804 ------10,804 High Pressure Water Blasting Equipment - - - 375,000 - - - - - 375,000 Pave East Side Perimeter Roads (Design and Construction) - - - - 304,000 2,736,000 - - - 3,040,000 Perimeter Fence Improvements - - - 485,200 1,940,800 - - - - 2,426,000 PFC #13 Reimbursement of Local Share - Closed AIP Grants ------Runway 16R/34L Phase 1 Rehabilitation (Design and Construction) - - 6,356,000 19,068,000 6,356,000 - - - - 31,780,000 Runway 16R/34L Phase 2 Rehabilitation (Construction) - - - 6,801,719 20,405,156 - - - - 27,206,875 Sand Storage Building 18,550 ------18,550 Sand Loading Equipment Storage Building ------SCAN Sensor Replacement - - 20,900 ------20,900 Snow Removal Equipment, Ph II - 1,080,000 2,128,000 850,000 - - - - - 4,058,000 Southwest Air Cargo Ramp (Phase 1) ------1,650,000 18,200,000 - 19,850,000 Southwest Air Cargo Ramp (Phase 2) ------664,000 7,280,000 7,944,000 Taxiway C and Connectors Reconstruction (Design & Construction) 8,052,575 1,877,833 ------9,930,408

$ 8,308,263 $ 6,266,437 $ 10,431,400 $ 33,190,719 $ 34,144,556 $ 18,340,200 $ 2,736,000 $ 19,714,000 $ 8,130,000 $ 141,261,576 CAPITAL IMPROVEMENT PROGRAM FY2017- Five Year Plan Reno-Tahoe Airport Authority

Prior FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 Total Priority Years FY17-24 TERMINAL No. Actual Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast

Building Control System Upgrade - Terminal HVAC Plant - 158,000 ------158,000 Building Control System Upgrade, Phase II - - 185,000 ------185,000 CCTV Camera Installation, Phase IV - - 90,000 ------90,000 Concourse "C" Concession Remodel - 14,450 ------14,450 Connector Retail Space- HVAC, Ceiling and Lighing - 37,525 ------37,525 Jet Bridge Carpet Replacement - - 70,000 ------70,000 Jet Bridge Replacement (Four Concourse "C" and Two Concourse "B") - - - 609,450 3,453,550 - - - - 4,063,000 Jet Bridge Replacement (One Concourse "C" and Four Concourse "B" - - - - 774,400 3,097,600 - - - 3,872,000 Passenger Escalator Replacment - - - - - 422,000 1,688,000 - - 2,110,000 Service Animal Relief Area 6,152 37,449 ------43,600 Stairway Install for Expansion of Building 5,600 42,900 ------48,500 Terminal Building System Renewal Program (FY 2019-24) - - - 300,000 300,000 300,000 300,000 300,000 300,000 1,800,000 Terminal Elevator / Escalator Replacement - 25,000 367,500 2,057,500 - - - - - 2,450,000 Terminal Passenger Notifications Systems Replacement 490,600 633,375 142,775 ------1,266,750

$ 502,351 $ 948,699 $ 855,275 $ 2,966,950 $ 4,527,950 $ 3,819,600 $ 1,988,000 $ 300,000 $ 300,000 $ 16,208,825

CAPITAL IMPROVEMENT PROGRAM FY2017- Five Year Plan Reno-Tahoe Airport Authority

Prior FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 Total Priority Years FY17-24 286 BAGGAGE HANDLING SYSTEM No. Actual Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast

Baggage Handling System PLC Hardware Upgrade - - - 175,000 - - - - - 175,000 Baggage Handling System Matrix 1 Carousel Refurbishment - - 160,000 ------160,000

$ - $ - $ 160,000 $ 175,000 $ - $ - $ - $ - $ - $ 335,000 CAPITAL IMPROVEMENT PROGRAM FY2017- Five Year Plan Reno-Tahoe Airport Authority

Prior FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 Total Priority Years FY17-24 LANDSIDE No. Actual Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast

Airline Crew Parking Lot North ------Landside Operations Office Remodel - - 23,775 ------23,775 Landside Operations Kitchen Remodel ------Landside Pavement Maintenance Program (2014-15) 373,328 ------373,328 Landside Pavement Maintenance Program (2015-16) 462,441 130,559 ------593,000 Landside Pavement Maintenance Program (2016-17) 1,116 558,666 ------559,782 Landside Pavement Maintenance Program (2017-18) - - 600,000 - 600,000 Landside Pavement Maintenance Program (2019-24) - - - 600,000 600,000 600,000 600,000 600,000 600,000 3,600,000 LED Lighting Replacement in Parking Structure - - 53,000 ------53,000 Parking Plaza Camera Replacement & Installation- Ph 1 - 20,000 ------20,000 Parking System Hardware/Software Upgrade 281,943 ------281,943 RAC Asphalt Rehabilitation - 2555 Aviation Way (Vanguard) 19,389 ------19,389 RAC Asphalt Rehabilitation - 1551 National Guard Way (Hertz) 27,670 ------27,670 RAC- Rental Car Return Gate Arm Installation - 59,848 ------59,848 RAC - Ready Return Carwash Equipment Replacement - - 635,000 ------635,000 RAC -Service Facility Parking Lot Lighting (Enterprise) - 17,560 ------17,560 RAC -Service Facility Parking Lot Lighting- 2nd Lot (Enterprise) - 6,582 ------6,582 RAC -Service Facility Asphalt Rehabilitation (Enterprise) ------RAC - Re-Striping of Rental Ready Area - 39,400 ------39,400 RAC - Service Facility Parking Lot Lighting (Hertz) - 29,619 ------29,619 RAC - Service Facility Asphalt Rehabilitation (Alamo/National) Vanguard ------Rental Car Facilities Asphalt Replacement - 176,000 1,760,000 ------1,936,000 RAC - 1551 National Guard Way Roof Replacement (Hertz) - - 67,775 ------67,775 Rental Car Renewal and Replacement Program - - - 550,000 550,000 550,000 550,000 550,000 550,000 3,300,000 287 Sky Walk Roof Replacement (Pedestrian Bridge) 5,200 56,200 ------61,400

$ 1,171,087 $ 1,094,433 $ 3,139,550 $ 1,150,000 $ 1,150,000 $ 1,150,000 $ 1,150,000 $ 1,150,000 $ 1,150,000 $ 12,305,070 CAPITAL IMPROVEMENT PROGRAM FY2017- Five Year Plan Reno-Tahoe Airport Authority

Prior FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 Total Priority Years FY17-24 OTHER No. Actual Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast

Air Cargo Way Drainage Repair - - 86,000 ------86,000 Building Improvements - AVA 2 (Pro Bumper) (3 Month Rent Credit) - 11,119 ------11,119 Capital Project Allowance - - - 500,000 500,000 500,000 500,000 500,000 500,000 3,000,000 FIS Facility Improvements- Phase I 3,600,904 59,988 ------3,660,891 FIS Facility Imp.- CBP Equipment, Furniture, Aesthetics, and Air Stairs 188,903 177,141 ------366,044 GA East Apron and Taxilane Reconstruction (Design) - - - - 220,000 - - - - 220,000 GA East Apron and Taxilane Reconstruction (Construction) - - - - - 2,480,000 - - - 2,480,000 GA East T-Hangar Roof Improvements - 25,000 ------25,000 GA West Gate 215 Relocation - 55,000 ------55,000 GA West Gutter Intallation - 15,000 ------15,000 GA West Tenant Restroom Facility - 20,000 ------20,000 GA West Hangar 10 Drainage Improvements - 88,000 ------88,000 GA West Asphalt Replacement between T-Hangar Row Taxilanes - 95,153 ------95,153 GA West Asphalt Replacement South T-Hangar Row - - 218,600 ------218,600 Mini Warehouse Storage Roof - Buildings C and D - 130,800 ------130,800 Mini Warehouse- Security Cameras - 21,603 ------21,603 Mini Warehouse - Asphalt Rehabilitation- AA/BB Commercial Building - 253,120 ------253,120 Mini Warehouse - Asphalt Rehabilitation- CC Commercial Building - - 200,000 ------200,000 Outside Properties Renewal Program - - - 250,000 250,000 250,000 250,000 250,000 250,000 1,500,000 Parking Lot Reconstruction - 1196 Telegraph Partial - 50,449 ------50,449 Parking Lot Repair - NDOT Motor Pool - 10,000 ------10,000 Roof Replacement - 485 South Rock (Sierra Air) - - 64,000 ------64,000 Roof Replacement -FIS/CBP Building ------Security Cameras -1280 Terminal Way, Phase 2 - 23,798 ------23,798 288 Security Fence Improvements - AVA 2 (Pro Bumper) - 7,500 ------7,500 Solar Glare Analysis - 25,000 ------25,000

$ 3,789,807 $ 1,068,672 $ 568,600 $ 750,000 $ 970,000 $ 3,230,000 $ 750,000 $ 750,000 $ 750,000 $ 12,627,078

CAPITAL IMPROVEMENT PROGRAM FY2017- Five Year Plan Reno-Tahoe Airport Authority

Prior FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 Total Priority Years FY17-24 ADMINISTRATION No. Actual Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast

Administration Carpet Replacement - - 225,000 ------225,000 Camera Replacement Project (Phase I) - 44,695 ------44,695 Communications Center Systems Replacement 74,717 710,542 710,542 ------1,495,800 Communications Line Relocation - - 190,000 ------190,000 CCTV Camera Installation Phase II - 64,000 ------64,000 CCTV Camera Installation Phase III - 64,692 ------64,692 Digital Radio Equipment and Accessory Program (800 MHz) - 250,000 638,220 638,220 - - - - - 1,526,440 Fire Supression System - Main Computer Room - 17,200 ------17,200 Fire Sprinklers for Purchasing Warehouse - 232,600 ------232,600 Geographical Information System (GIS) 803,987 446,013 ------1,250,000 Geographical Information System (GIS) (No- PFC Funding) 32,431 20,000 ------52,431 Main IT Computer Server Room Encapsulation - 9,500 ------9,500 Master Plan Study Update and Airport Layout Plan Set 607 1,400,000 599,393 ------2,000,000 Operations Office Remodel - 8,000 ------8,000 Purchasing Office Relocation and EOC Remodel - - 85,000 ------85,000 Restroom Remodel - Reception & Conference Room A/B - 129,360 ------129,360 Technology and Information Systems Renewal Program - - - 300,000 300,000 300,000 300,000 300,000 300,000 1,800,000 Telephone System Upgrade, Ph 2 - 297,630 ------297,630

$ 911,741 $ 3,694,232 $ 2,448,155 $ 938,220 $ 300,000 $ 300,000 $ 300,000 $ 300,000 $ 300,000 $ 9,492,348 CAPITAL IMPROVEMENT PROGRAM FY2017- Five Year Plan Reno-Tahoe Airport Authority

Prior FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 Total Priority Years FY17-24 RENO STEAD No. Actual Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast

Airfield Pavement Program- RTS (2019-2024) - - - 100,000 100,000 100,000 100,000 100,000 100,000 600,000 Tower ------450,000 450,000 Apron Phase 1, 2, and 3 Rehabilitation (Design) - - - - 1,342,000 - - - - 1,342,000 Apron Phase 1 Rehabilitation (Construction) - - - - - 4,228,000 - - - 4,228,000 Apron Phase 2 Rehabilitation (Construction) ------6,793,000 - - 6,793,000 Building 7003 (FBO Office) Roof Replacement (Aviation Classic) 4,765 65,735 - - 70,500 Building 7003 (FBO Office) Roof Mounted Air Units - 30,059 ------30,059 Concrete Apron (Design and Construction) 5,727 941,268 1,819,005 ------2,766,000 Hangar #6 HVAC Replacement, Ph II - 50,250 ------50,250 Hangar #6 Lighting Improvements, Ph 1 - 48,500 ------48,500 Hangar #6 Lighting Improvements, Ph 2 - - 48,500 ------48,500 Landside Pavement Program- RTS (2019-2024) - - - 45,000 45,000 45,000 45,000 45,000 45,000 270,000 Maintenance Shop Heaters and Lighting 778 12,522 ------13,300 Maintenance Shop Rain Gutters - 12,000 ------12,000 Military Surplus Property Site 15,730 ------15,730 Moya Boulevard Extension, Phase I and II (Design) - - - - - 499,000 - - - 499,000 Moya Boulevard Extension, Phase I ------3,835,000 - - 3,835,000 Moya Boulevard Extension, Phase II ------1,982,000 - 1,982,000 Nevada Army Guard Access Road, Ph I 2,427 265,575 263,148 ------531,150 Nevada Army Guard Access Road, Phase II / Taxiway D - - 450,000 ------450,000 Runway 8/26 Rehabilitation - 3,285,000 12,099,750 6,515,250 - - - - - 21,900,000 Stead Solvent Site 1,032,235 277,722 229,501 230,049 236,721 172,412 177,412 189,405 187,851 2,733,308 Taxiway C Reconstruction & Edge Lighting (Design) 337,454 22,546 ------360,000 Taxiway C Reconstruction & Edge Lighting (Construction) - Phase I 1,729,698 30,302 ------1,760,000 289 Taxiway C Reconstruction & Edge Lighting (Construction) - Phase II 1,538,583 60,902 ------1,599,485 Terminal Access Road Rehabilitation - - 164,000 968,800 - - - - - 1,132,800 Wash Bay Restroom Remodel - - 16,900 ------16,900 Window Replacement -Aviation Classics - - 38,600 ------38,600

$ 4,667,398 $ 5,102,381 $ 15,129,404 $ 7,859,099 $ 1,723,721 $ 5,044,412 $ 10,950,412 $ 2,316,405 $ 782,851 $ 53,576,082 









   Section 9 – Debt Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 9 – Debt Summary

FY 2017-18 DEBT SERVICE

Total Debt Service Impact

Total debt service for FY 2017-18 is budgeted to be $2,247,300, a decrease of $1,328,578 or 37.2% below the FY 2016-17 Budget. This reduction is due to the final maturity of the 2011 Subordinate Lien Airport Revenue Notes (2011 Subordinate Notes) on July 1, 2017.

The 2011 Subordinate Notes carried a maximum principal amount outstanding of $20.350 million with repayment over a term of six years. Capital Projects financed included the new RTS Emergency Operations Center/Terminal Building and the RNO Airport Gateway program comprised of the Terminal Refurbishment Project and the Consolidated Security Checkpoint. Approximately 35% of annual debt service was funded by Passenger Facility Charges with no impact to the airline rates and charges calculation.

The coverage calculation in this package demonstrates that budgeted net revenues, gross revenues less operating expenses, pledged to debt service far exceed the 125% coverage requirement of the revenue bond resolution. “Coverage” requirements are included in bond resolutions to assure potential bond buyers that net revenues will be more than sufficient to pay the bond debt.

Senior Lien Airport System Revenue Bonds

On September 30, 2015, the RTAA issued the "Reno-Tahoe Airport Authority, Nevada, Airport Revenue Refunding Bond, Series 2015" (the "2015 Bond"). The proceeds from the bond sale were used to redeem the Airport Revenue Refunding Bonds, Series 2005 (the “Series 2005 Bonds”), which were outstanding as of July 1, 2015 in the amount of $20,940,000, and the cost of issuance necessary to execute this transaction.

The Series 2015 Bond is a direct loan of $20,690,000 secured through a Request for Proposals process issued on July 9, 2015 to numerous banks and financial lending organizations. Upon review of the submitted proposals, Compass Mortgage Corporation, an Alabama Corporation and a subsidiary of BBVA Compass, provided the most favorable business terms and conditions.

The 2015 Bond reflects the remaining outstanding debt from the 1996 bonds issued to construct the RTAA’s three story, 2,400 space parking garage, a new terminal access roadway system to accommodate the parking garage, and a passenger skyway to connect the parking garage to the terminal.

The terms and conditions governing the 2015 Bond are established under a new Bond Resolution No. 526, which is substantially similar to terms and condition established for the Series 2005 Bonds.

290 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 9 – Debt Summary

The 2015 Bond will be paid solely from and secured by a pledge of Net Revenues derived from the operations of the Airport System and certain funds and accounts. Net Revenue represents gross revenues of the Airport System less operating and maintenance expenses. The RTAA’s debt is limited by the outstanding bond resolution requirement that net revenues pledged to pay debt service must exceed 125% of annual debt service.

The interest rate on the Series 2015 Bond is 2.75% with an eleven (11) year term consistent with the refunded Series 2005 Bonds. With the refunding, the RTAA will benefit from $2.917 million of gross savings or $2.519 million on a present value basis in lower debt service payments. This represents a net present value savings as a percentage of refunding bonds of 12.03%.

Going forward in FY 2017-18 Budget through the maturity of the 2015 Bond, the following table outlines the principal and interest payments under the refunded Series 2005 Bonds:

Series 2015 Bond Bond Year Principal Interest Total Debt ending July 1 Service 2018 1,760,000 487,300 2,247,300 2019 1,810,000 438,900 2,248,900 2020 1,860,000 389,125 2,249,125 2021 1,910,000 337,975 2,247,975 2022 1,965,000 285,450 2,250,400 2023-2026 8,415,000 586,575 9,001,575 $17,720,000 $2,525,325 $20,245,325

Net Revenue derived from the public parking operation, after related operating expenses, is available and more than sufficient to meet this debt obligation.

The graph below illustrates the RTAA’s actual annual debt service for Fiscal Years 2014-15 and FY 2015-16 along with estimated annual debt service from FY 2016-17 through FY 2019-20.

291 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 9 – Debt Summary

ALLOWED PURPOSES AND TYPES OF DEBT

The administration of the RTAA's debt is controlled by Federal and State laws (Local Government Securities Law) and the bond resolutions adopted when the revenue bonds were sold to finance airport improvements. These laws specify the public notices and hearings that must be conducted, and the approvals needed when money is to be borrowed. The Local Government Securities Law and the bond resolutions also control short term financing capabilities, as well.

In order for revenue bond interest to be tax-exempt to the bond holders of the debt, the RTAA must be in complete compliance with U.S. Treasury Department laws and regulations.

Most local governments issue general obligation bonds. The repayment of general obligation bonds is secured by the taxing power of the local government. A statutory ratio of outstanding general obligation debt to assessed valuation often limits the maximum amount of general obligation debt a local government may have outstanding. Since the RTAA does not receive any property or general sales taxes, an assessed value based debt limitation does not apply.

292 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 9 – Debt Summary

The RTAA has sold only revenue bonds to finance the construction of airport projects. The bonds are called revenue bonds because the repayment of the bonds is secured solely by the revenue of the airport system. The entity issuing the revenue bonds must have sufficient revenues to pay the debt service of the bonds sold. Bonds are also only sold for the construction of projects with useful lives that exceed the life of the bond issue.

The RTAA has issued revenue bonds first to finance airport improvement projects, and then to refinance or refund the outstanding bonds to obtain lower interest rates.

The interest received by RTAA bondholders can be tax exempt or taxable depending on the use of the bond proceeds. The Series 2015 outstanding senior bond has been determined by bond counsel to qualify for tax-exempt status.

DEBT LIMIT

The RTAA’s debt is limited by the outstanding bond resolution requirement that net revenues (operating revenues less operating expenses) pledged to pay debt service exceed 125% of annual debt service. This test of net pledged revenues is shown on the last page of this section. In addition, schedules are enclosed that show the current and future year’s debt service amounts. The RTAA has a cap on annual debt service, not a cap on the amount of outstanding debt. This is a common provision in airport revenue bond resolutions.

Part of the RTAA’s process of selling revenue bonds is the issuance of a feasibility report by an independent airport consultant. This report projects airport revenues, airline rates, operating expenses, and the new and existing debt service. The consultant’s report must project that net pledged revenues will exceed 125% of the annual amount needed for debt service, or the financing is neither feasible nor allowed by the additional bonds test of the existing bond resolution.

DEBT STRUCTURE

The principal and interest paid to the RTAA’s bondholders is allocated to the cost centers based on how the proceeds from the various bond issues are used. Bonds sold to finance improvements in the airline costs centers, whose debt service will be included in airline rates, most likely will trigger the Majority-In-Interest (MII) provision of the airline use and lease agreement. For a detailed explanation, please see Section 5 – Financial and Budgetary Policies

The debt service is also structured not to begin until the facility being constructed is completed. This is done by delaying the repayment of principal until after the facility is occupied and interest is capitalizing during the construction period. Capitalizing interest is done by selling additional bonds, above the amount needed for construction, resulting in additional funds to make the interest payments until the new facility is occupied and generating revenue.

293 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 9 – Debt Summary

Offsetting the sale of additional bonds to pay capitalized interest is the practice of “net funding” where investment earnings on the bond proceeds unspent during the construction process are used to partially offset the cost of capitalized interest.

When the RTAA finances capital projects by issuing long term debt, it will pay back the bonds within a period not to exceed the estimated useful life of the project. The RTAA will not use long term debt for current operations. The RTAA will maintain good communications with its bond rating agency regarding its financial condition and will follow a policy of full disclosure in every financial report and offering prospectus.

As of October, 2015 and the issuance of the 2015 Bond, the RTAA no longer has any publicly issued debt and no longer is required to have a credit rating from a nationally recognized rating agency (Fitch, Moody’s, or S&P) . However, the RTAA will continue to maintain its financial position based on the established criteria outlined by the major rating agencies in order to obtain a minimum investment grade rating of “A” with a stable outlook. This policy is to ensure an investment grade rating should the RTAA decide to issue any future public debt.

Nevada state law, the bond resolutions, and the bond insurance policies all define the allowable types of investments that can be made with bond proceeds during construction of capital projects.

REFUNDING OF DEBT

RTAA is continually evaluating whether the refinance of its outstanding debt to take advantage of lower interest rates is economically feasible. At least a three percent (3%) net present value debt service savings is the minimum industry standard necessary to justify such re-financings.

Internal Revenue Code and Income Tax Regulations Section 149(d)(3)(A)(i) limits the number of times an issuer may advance refund an original bond issue. If the original bond issue was issued before 1986, two advance refundings are permitted. If the original bond issue was issued after 1985, only one advance refunding is permitted.

The installments of principal of the 2015 Bond are eligible for prepayment, in whole or in part, at the option of the Authority, at any time and from time to time, at a price equal to the principal amount prepaid, the accrued interest thereon to the prepayment date, and the make whole premium.

If the Authority makes any prepayment of the outstanding principal balance of the 2015 Bond prior to July 1, 2025, the Authority shall incur a prepayment fee equal to the quotient of (i) the product of (a) Average Yield Differential, times (b) Average Principal, multiplied by (c) Percent Prepaid, times (d) Days Remaining, divided by (ii) 360.

294 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 9 – Debt Summary

"Average Yield Differential" means the difference between (i) the U.S. Treasury constant maturity yield for the date on which the loan was originated and (ii) the U.S. Treasury constant maturity yield that is the same as the remaining term of the loan at the Prepayment Date.

With the issuance of the 2015 Bond at significantly lower rates and the maturity of the 2011 Subordinate Lien Notes on June 30, 2017, the RTAA currently does not have an opportunity to lower its debt service through refunding at this time.

295 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Summary of Bonded Indebtedness

FY 2017-18 Debt Service Allocation to Airport Cost Centers

Principal Interest Paid by PFC Total 2015 1,760,000 487,300 - 2,247,300

TOTAL 2,247,300

Ground Reno Airfield Terminal BHS Other Total Trans Stead

2015 0% 0% 0% 100% 0% 0% 100%

Debt Service 2015 - - - 2,247,300 - - 2,247,300

TOTAL - - - 2,247,300 - - 2,247,300

296 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Summary of Bonded Indebtedness

Subordinate Subordinate 2005 Revenue Notes (Series Notes (Series 2015 Revenue Total Bonded Refunding Bonds 2011A) 2011B) Refunding Bonds Indebtedness

Amount of original issue$ 29,775,000 $ 15,000,000 $ 5,303,000 $ 20,690,000 $ 70,768,000 Bonds / Notes retired 29,775,000 15,000,000 5,303,000 2,970,000 53,048,000

Bonds / Notes Outstanding July 1, 2017$ - $ - $ - $ 17,720,000 $ 17,720,000 Bond / Notes retired / issued FY 2017-18 - - - (1,760,000) (1,760,000)

$ - $ - $ - $ 15,960,000 $ 15,960,000

FY 2017-18 Debt service requirement

Principal payment due$ - $ - $ - $ 1,760,000 $ 1,760,000 Interest payment due - - - 487,300 487,300 PFCs applied - - - - -

Total FY 2017-18 Debt Service $ - $ - $ - $ 2,247,300 $ 2,247,300

Annual Debt Service

$3,000,000

$2,500,000

$2,000,000

$1,500,000

$1,000,000

$500,000

$0

2015 Revenue Bond

297 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Schedule of Debt Service

Bond Airport Revenue Year Refunding Bonds Ended Series 2015 July 1 Principal Interest Total

2018 1,760,000 487,300 2,247,300 2019 1,810,000 438,900 2,248,900 2020 1,860,000 389,125 2,249,125 2021 1,910,000 337,975 2,247,975 2022 1,965,000 285,450 2,250,450 2023 2,020,000 231,413 2,251,413 2024 2,070,000 175,862 2,245,862 2025 2,130,000 118,938 2,248,938 2026 2,195,000 60,362 2,255,362 $ 17,720,000 $ 2,525,325 $ 20,245,325

298 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Net Pledged Revenues Test

FY 2015-16 FY 2016-17 FY 2017-18 Actual Budget Budget Airport System Revenues

Airline fees and rentals (a) Landing fees$ 7,166,407 $ 7,490,281 $ 8,568,704 Terminal building space rental 6,511,115 8,220,700 7,561,500 TOTAL Airline fees and rentals 13,677,522 15,710,981 16,130,204

Non-Airline Revenues Other Aircraft Fees 904,690 940,200 969,000 Concession fees (b) 10,861,366 10,791,000 11,652,700 Parking and Ground Transportation 10,519,785 10,113,000 11,330,900 Building, Hangar and Land Rent 7,087,994 7,343,800 7,650,650 Reimbursement for Services (BHS) (c) 2,419,689 2,646,808 2,592,581 Other operating revenues 42,873 61,200 36,700 31,836,397 31,896,008 34,232,531

Total Operating Revenue 45,513,919 47,606,989 50,362,735

Non-Operating Revenue Trust Fund Investment Income 367,167 273,000 422,400 Other Non-Operating Income 1,780,800 1,629,900 3,620,300

Gross pledged revenues $ 47,661,886 $ 49,509,889 $ 54,405,435

Airport system operation and maintenance expenses (37,603,816) (40,290,571) (42,100,139)

Transfers - General Purpose Fund for G/L on Sale of Capital Assets (105,471) - (1,850,000) Airline profit share 2,347,074 972,600 2,167,400

Transfers - Special Fund for 35% of gaming revenue (374,991) (316,715) (342,195)

Pledged PFC Revenues (Senior Bonds) - - -

Net pledged revenues $ 11,924,681 $ 9,875,203 $ 12,280,501

Debt Service - Senior Lien Bonds 2,310,285 2,249,463 2,247,300

Debt Service Coverage Ratio - Senior Lien Bonds 5.16 4.39 5.46

Net Pledged revenue available for Subordinate Notes 9,614,396 7,625,740 10,033,201 Pledged PFC Revenues 1,813,919 1,812,216 - Pledged revenue available for Subordinate Notes 11,428,315 9,437,956 10,033,201

Debt Service - Subordinate Notes (Series 2011A) 2,744,925 2,743,425 - Debt Service - Subordinate Notes (Series 2011B) 395,130 395,206 - Total Subordinate Notes 3,140,055 3,138,631 -

Debt Service Coverage Ratio - Subordinate Lien Notes 3.64 3.01

299 









   Section 10 – Supplemental Data Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

Air Service Development

According to the U.S. Department of Transportation’s (DOT) Bureau of Transportation Statistics (BTS), U.S. scheduled passenger airlines reported an after-tax net profit of $13.5 billion in 2016, down from $24.8 billion in 2015. This is the seventh consecutive year that the 25 U.S. airlines, as a group, have reported an after-tax net profit.

Net Income 2011-2015, U.S. Scheduled Passenger Airlines Billions of dollars ($)

Source: BTS

In addition to the after-tax net profit of $13.5 billion based on net income reports, the scheduled service passenger airlines reported a $24.8 billion pre-tax operating profit in 2016, down from $28.0 billion in 2015. The airlines reported a pre-tax operating profit, as a group, for the eighth consecutive year.

Total operating revenue for the 25 U.S. scheduled passenger airlines in 2016 was $168.2 billion. Airlines collected $125.2 billion from fares, 74.5% of total 2016 operating revenue.

Total operating expenses for all passenger airlines in 2016 were $143.3 billion, of which fuel costs accounted for $22.4 billion, or 15.6%, and labor costs accounted for $49.7 billion, or 34.7%.

In 2016, passenger airlines collected a total of $4.2 billion in baggage fees, 2.5% of total operating revenue, and $2.9 billion from reservation change fees, 1.7% of total operating revenue. Fees are included for calculations of net income, operating revenue and operating profit or loss.

300 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

U.S. airlines and foreign airlines serving the United States carried an all-time high of 932.0 million system-wide (domestic and international) scheduled service passengers in 2016, 3.8% more than the previous record high of 897.9 million reached in 2015.

The system-wide increase was the result of a 3.3% increase from 2015 in passengers on domestic flights (719.0 million in 2016) and 5.5% growth from 2015 in passengers on U.S. and foreign airlines’ flights to and from the U.S. (213.0 million in 2016).

Annual Passengers on All U.S. Scheduled Airline Flights (Domestic & International) and Foreign Airline Flights to and from the United States, 2003-2016 (Passengers in millions)

Source for Recession Dates: National Bureau of Economic Research, US Business Cycle Expansions and Contractions Source for Passenger Data: BTS

U.S. airlines carried 3.3% more passengers on domestic flights and 1.7% more passengers on international flights in 2016 than in 2015 for a system-wide increase of 3.1%. Foreign airlines carried 9.4% more passengers to and from the United States than in 2015. The 213.0 million passengers on international flights to and from the United States was a record high, exceeding the previous high set in 2015.

In 2016, Reno-Tahoe International Airport (RNO) served 3,650,830 passengers, an increase of 6.4% when compared to 2015. The rise in passenger traffic can be attributed to the new flights and the increased seat capacity on certain routes. In addition, the growing regional economy played a role to attract travelers to the region.

301 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

RNO offered a total of 19,620 scheduled departures in 2016, an increase of 4.6% when compared to the 2015 schedule. Scheduled seat capacity was up 8.1% at 2,318,681 (one way) for the same period. In 2016, RNO was served by eight airlines providing flights to 22 non-stop destinations.

Due to lower airline operating costs driven by low fuel prices in 2016, RNO air fares decreased 1% when compared to the prior year.

Southwest Airlines continues to be the dominant carrier at RNO carrying 42.4% of the total Calendar Year 2016 passengers, followed by American Airlines at 20.5%. RNO offers better air service than any other airport for a city of comparable population size anywhere in the United States.

In order to stay visible in the aviation industry, the Air Service Development (ASD) staff attended over 43 prearranged individual one-on-one meetings with different airlines in 2016. In addition, staff held numerous conference calls through the year 2016 with airline network planning, capacity planning, schedule planning and marketing teams of several airlines. As a result of this effort, airlines added non-stop flights from Reno to the following: (1) Orange County, CA; (2) Oakland, CA; (3) Long Beach, CA; (4) San Jose, CA; (5) Denver, CO; (6) Atlanta, GA; (7) Chicago, IL; and (8) Dallas (Love Field), TX.

302 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

The RTAA Board and staff continue to actively pursue new air service. However, competition for air service among the nation’s 450+ commercial service airports is increasingly fierce. In the last decade, the airline industry’s business model has shifted away from market share strategies to a focus on return on investments.

The staff has made significant progress in the development of educational programs in support of air service. This included formalizing a grass-roots Community Outreach Program as well as a 20 week advertising campaign implemented in conjunction with the airport’s airline partners and destination cities served non-stop from RNO.

In addition, staff developed a presentation titled “Air Service 101”, which provides travel and community groups an overview of air service development, an airline business overview, key economic factors and considerations from the airline’s perspective, and the opportunities/ changes faced by RNO. To enhance this presentation, airline representatives are invited to the RNO’s catchment area and are integral to the presentation and the question and answer sessions that follow.

Finally, the Regional Air Service Corporation (RASC) is taking the lead in community wide efforts to create strategies to help offset risk to potential new markets. This is in conjunction with the RTAA’s airline incentive program, which allows up to 12 months of free terminal building rent and landing fees as well as marketing support promoting new air service to RNO.

Three major air cargo carriers, DHL, FedEx, and United Parcel Service (UPS) serve RNO. During the calendar year 2016, RNO handled 156,410,910 pounds of cargo, an increase of 13% when compared to the calendar year 2015. This represents the highest annual cargo tonnage reported at RNO during the last ten years, showing continued strength in the economy as well as the growing business diversification in Northern Nevada.

This is the seventh consecutive year of cargo growth at RNO, primarily driven by major warehousing, pharmaceutical, e-commerce and distribution facilities in the region. Growth in industrial development areas such as the Tahoe/Reno Industrial Center has continued to help spur cargo growth and economic diversity.

RNO is truly a regional airport with a catchment area of over one million people in the cities of Reno, Sparks, Carson City, along with eight counties in Nevada, and five counties in north central California. RNO is also the “gateway” to Lake Tahoe.

RNO is located four miles southeast of Reno’s central business district. The Reno-Stead Airport (RTS) is located 11 miles northwest of the central business district. The state capital, Carson City, is 30 miles south of Reno. Elected officials and state employees use RNO to get back to their constituents or to fly to the many state agency offices located 350 miles to the south in Las Vegas.

303 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

The closest competing airport is approximately 140 miles away in Sacramento, California. Since Sacramento is separated from Reno by the Sierra Nevada Mountains, which can be difficult to cross in the winter snows and other inclement weather, few western Nevada passengers use the Sacramento Airport.

The second airport operated by the RTAA is the Reno-Stead Airport, a general aviation airport. General aviation airports typically do not have scheduled air service, but do provide other important aviation related facilities. RTS has military, helicopter, charter, and private aircraft operations and aircraft owners and aviation related businesses lease land or buildings. RTS is also the home of the annual National Championship Air Races, a Bureau of Land Management base for firefighting aircraft, and a Nevada Army National Guard helicopter base.

Special Community Events

With over 5 million annual visitors, Reno, Sparks and Lake Tahoe feature a wide range of fun- filled events that offer something for everyone. In addition to the area’s breath-taking beauty, Reno and Lake Tahoe offer an amazing mix of history, art, and culture. Tourism and conventions continue to be big business in the Reno-Sparks area.

The Reno-Sparks Convention & Visitors Authority (RSCVA) owns and operates several facilities designed to draw out of town visitors. For example, the National Bowling Stadium hosts five-month long bowling competitions including the United States Bowling Congress (USBC) Open Championship and the Women’s Championship. The two tournaments combined bring 150,000 visitors to town with an estimated economic impact of nearly $360 million. The schedule of bowling competitions to be held in our community through 2025 is provided in Section 1 – Introduction in the “Bowling Tournament Update”.

The Reno-Tahoe area draws hundreds of thousands of visitors to northern Nevada for community-wide special events throughout the year. This year’s special event season started with the Reno Rodeo, a ten-day event in its 94th year, and a PRCA (Professional Rodeo Cowboys Association) sanctioned sporting event. The Reno Rodeo is a non-profit organization made up of over 350 volunteers with over 120,000 fans in attendance; it is the 4th largest PRCA tour rodeo. The event impacts the Reno area economy by approximately $42 million. This event is held at the Reno Livestock Events Center, a 35,000 square feet exhibit space with an indoor arena seating 6,200 and a lighted outdoor arena seating 9,000.

Reno is home to Artown, a month-long summer arts festival, which features about 500 events produced by more than 100 organizations and businesses in nearly 100 locations citywide. As noted by the National Endowment for the Arts, Artown is one of the most comprehensive festivals in the country. It brings the arts to Reno each July with a packed calendar of events and 350,000 attendees.

304 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

The first week of August is reserved for Hot August Nights; a celebration of the 50’s, 60’s and 70’s emphasizing the cars of the era. More than 800,000 people flock to the event and bring an economic impact of $351 million. There are more than 5,000 classic cars from 36 states across the nation, including Alaska, Massachusetts and Florida and three Canadian provinces. Californians bring over 2,500 cars for this event. Nevadans have over 1,500 cars entered.

The Reno-Tahoe region also hosts an annual PGA golf tournament: the 2017 Barracuda Championship held August 3 – 6, 2017.

During the last week of August each year, the Burning Man Art Festival, with its focus on community, art, self-expression, and self-reliance, creates Black Rock City a hundred miles north of Reno, NV, on the playa of the Black Rock Desert. Burning Man isn't your usual festival, with big acts booked to play on massive stages. In fact, the event is more the creation of a city than a festival, wherein almost everything that happens is created entirely by its citizens, who are active participants in the event. At least 18,000 of the 60,000 participants travel by air through RNO, including a host of international visitors from more than 30 different countries. During Burning Man, Black Rock City, through careful planning, emerges from the playa dust to become one of Nevada's largest cities for a week.

There are many great events in the area in September, and starting things off is the Best of the West Rib Cook Off held in the City of Sparks and sponsored by the Nugget Casino Resort. Following the Rib Cook Off are the Reno Balloon Races, the largest free hot air ballooning event in the nation. Throughout the event an estimated 140,000 spectators brave the early morning chill to view more than 100 balloons each year.

The blue September skies of Reno are also the home of the National Championship Air Races (NCAR). The NCAR and Air Show have run at the Reno-Stead Airport since 1964. With more than 150,000 people in attendance and an annual economic impact of $70 million, the National Championship Air Races bring together aviation and sports enthusiasts from around the world, including strong attendance from California, Nevada and the Pacific Northwest. Race and air show participants include astronauts, airline pilots, and military and aviators.

Street Vibrations is the place to be for those in search of a celebration of music, metal and motorcycles. An official Northern California Harley-Davidson Dealers Association event, Street Vibrations offers tours, entertainment, parades, ride-in shows, Chrome Alley retail vendors, Camel Roadhouse, the Harley-Davidson Factory Store, concerts and more. The event attracts an estimated 40,000 people to the Reno/Tahoe/Carson City area and has a local economic impact of $72 million. Now ranked the 6th largest motorcycle event in the nation, Street Vibrations combines the best bikes the West has to offer with incredible bands on multiple stages throughout the community.

305 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

Supplemental Information

The following charts show five fiscal years of the RTAA’s activity levels and measures of financial effectiveness. The first three years’ numbers on these charts are year-end actual amounts and the last two years (FY 2017 and FY 2018) are the budgeted amounts.

In addition, tables and charts that detail local demographic, employment, and economic information are provided.

306 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

Enplaned Passengers

Enplaned passengers in FY 2017-18 at the RNO are projected to be 1,948,002, an 8.1% increase compared to the prior year budget of 1,801,291 and a 9.5% increase compared to the FY 2015-16 actual results.

The average load factor for scheduled air service in fiscal year 2016-17 was 78.9%. With the capacity increases and new routes announced by the commercial airlines serving RNO, the load factor is projected to modestly decrease to 76.7% for the FY 2017-18.

In June 2017, the average enplaned load factor at RNO was 80.2%, a decrease of 1.6 load factor points compared to the same period last year.

307 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

Airline Market Share

Airline Passenger Market Share – FY 2016-17 Actual Results Number of Enplaned Percent of Passenger Market Share Southwest 816,323 42.8% American 370,451 19.4% United 226,272 11.9% Alaska 226,117 11.8% Delta 136,418 7.1% JetBlue 77,686 4.1% Allegiant 31,504 1.7% Volaris 20,966 1.1% Others 3,450 0.2% Total 1,909,187 100%

308 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

The more diverse an airport’s airline market, the less susceptible that airport is to the effects of an individual airline having financial problems or changing flight activity.

This chart shows that RNO has six main carriers providing 97.1% of the passenger flights with another seven carriers making up the balance. This table reflects actual enplaned passenger numbers for the period July 1, 2016 through June 30, 2017. As shown, Southwest had 42.8%, American 19.4%, United 11.9%, and Delta 7.1%

In the previous FY 2015-16 chart. Southwest had 42.9% of the passengers, American had 21.7%, United had 12.2%, Alaska had 11.5%, and Delta had 7.2%. The most significant change was a decrease by American of 2.3% due to schedule changes resulting from the merger of American and US Airways.

While one airline having such a large share of the passenger traffic might be a concern, Southwest is one of the most stable and financially strong airlines in today’s air travel market.

RNO also has strong representation from all three global alliances. An is an agreement between two or more airlines to cooperate on a substantial level. The three largest passenger airline alliances are , SkyTeam, and .

309 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

Air Carrier Operations

An operation is the term used to describe an aircraft landing or taking off. Scheduled annual operations are the landings and takeoffs of the scheduled airline flights for an entire year. Operations are projected to be approximately 43,734 in FY 2017-18, an increase of 10.4% as compared to the adopted Budget for FY 2016-17.

The increase in FY 2017-18 of 4,110 operations or 10.4% above the FY 2016-17 budget primarily reflects the impact of additional service by Allegiant, Alaska, Delta, JetBlue, Southwest and United.

This activity does not include scheduled cargo service or other non-scheduled operations at the airport such as charter flights, military, or general aviation.

310 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

Daily Scheduled Departures

This graph shows the average number of flights departing RNO each day in the month of June. For FY 2017-18, the forecasted average daily flights are increasing 8.2% to 66. The increase of eight daily departures as compared to FY 2015-16 actual results reflects growing stability in the regional economy and enhanced airline profitability in our market.

311 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

Airline Cost Per Enplaned Passenger

The cost per enplaned passenger (CPE) ratio measures the airport related costs paid by the airlines for each enplaned passenger flown from an airport. The airport costs incurred by an airline are landing fees and terminal building rents.

While rents and landing fees are approximately 8% of the domestic passenger airlines’ operating costs in 2016 according to Bureau of Transportation Statistics (BTS), RTAA works hard to minimize the cost per enplanement to encourage airlines to serve the Northern Nevada market. In comparison, Labor and Fuel represent 34% and 14% of the airline’s 2016 operating costs, respectively.

The RNO CPE of between $7.00 and $8.00 for the FY of 2014 through 2018 compares favorably to the 2015 median ratio for U.S. airports of $9.19 per Fitch Ratings “Peer Review of U.S. Airports - Attribute Assessments, Metrics and Ratings” published in December 2016.

The RTAA has been successful in keeping this cost relatively stable despite the increasing costs of operating the airport and lower traffic levels during this period.

312 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

Concession Revenue Per Enplaned Passenger

Concession revenue per enplaned passenger is a measure of concessionaire’s ability to generate revenue from passengers using RNO’s terminal facilities. This ratio allows staff to compare the performance from year to year and between airports.

The following sections outline the main concession revenues of the RTAA as presented in a per enplaned passenger format.

313 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

Gaming Concession Revenue per Enplaned Passenger

Few other airports have gaming revenues to compare. The gaming revenues are budgeted at approximately $977,700 for FY 2017-18 and are projected to be $976,000 for the current year, FY 2016-17.

This concession is awarded to International Game Technology (IGT) under a five year agreement, which started on December 1, 2015. The revenue decrease as compared to the prior years is due to the new revenue provisions that provide a lower percentage to be paid to the RTAA on Net Win. “Net Win” is defined as the difference between gaming wins and losses before deducting expenses.

Despite growing passenger traffic, the reduction in the RTAA’s percentage of Net Win also reflects the impact of expanding entertainment options available to passengers due to electronic devices.

314 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

Food and Beverage Concession Revenue per Enplaned Passenger

The food and beverage concession agreement currently pays the RTAA the greater of a minimum guaranteed amount or a percentage of gross revenues. Per the existing contract with SSP America, the minimum annual guarantee amount is set annually at 85% of prior year’s payments, or $885,800, whichever is greater.

The budgeted revenue of $1.149 million for FY 2017-18, results in estimated revenue of $0.59 per enplaned passenger. This estimate reflects the percent of gross revenue exceeding the Minimum Annual Guarantee (MAG) due to increased passenger traffic passing through RNO.

In addition, SSP has generated higher revenue per enplaned passenger due to customer’s willingness to expend more of the discretionary income and an increase in the variety of restaurant options available. In FY 2016-17, SSP opened Tap & Pour on Concourse C. This new restaurant concept has placed an emphasis on creative, quality small plate foods, in addition to offering a full bar. Sales revenue exceeded the prior year’s revenue at the same location by more than 30%.

315 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

Merchandise Concession Revenue per Enplaned Passenger

The RTAA’s merchandise concession stores have offerings that would fit in any upscale shopping mall. There are four post security stores, branded as the High Mountain Market, including Brighton Collectibles, No Boundaries (an outdoor apparel store), In Motion (a high tech electronics shop), and CNBC (news and gifts).

The concession agreement awarded to The Paradies Shops calls for payment to the RTAA of a percentage of revenues ranging from 12% to 23% depending on product type or a minimum annual guarantee (MAG), which is 85% of previous year’s payments but not less than $901,000, whichever is greater.

In addition, Paradies also operates Adventure News (news and gifts) and a PGA Tour shop, which are available to passengers pre-security.

In addition, a women’s apparel store operated by Forever Heather is available to post-security passengers on Concourse “B”. Prior to this relocation, Forever Heather operated from a pre- security location. The pre-security location is now home to a Squaw Valley Mountain merchandise and concierge store.

For FY 2017-18, revenues are expected to be $1,111 million. This is a 7.4% increase compared to the FY 2016-17 Budget and 3.4% increase above the FY 2016-17 projected revenues.

316 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

Rental Car Concession Revenue per Enplaned Passenger

Auto Rental Revenue per Enplaned Passenger

$4.00 $3.57 $3.66 $3.69 $3.66 $3.69

$3.00

$2.00

$1.00

$0.00 2014 2015 2016 2017 2018 Fiscal Year

The RTAA has six (6) car rental company agreements with nine (9) brands: (1) Avis/Budget Car Rental doing business as Avis and Budget, (2) DTG Operations doing business as Dollar and Thrifty, (3) Enterprise, (4) Hertz, (5) Vanguard Car Rental doing business as Alamo and National, and (6) Payless Car Rental.

In 2007, Enterprise acquired Vanguard Car Rental, doing business as Alamo and National. In 2013, the Hertz Corporation acquired DTG Operations, doing business as Dollar and Thrifty and Avis/Budget acquired Payless Car Rental. Effectively, three (3) rental car companies control the nine brands at RTAA.

Effective July 1, 2010, the rental car companies bid for the right to operate on-airport for a period of five years. In June 2015, the agreement was extended for an additional three year term through June 30, 2018. RTAA revenues are the greater of the minimum annual guarantee (MAG) or 10% of gross receipts earned by companies.

Based on forecasted passenger traffic and revenue per enplaned passenger included in the FY 2017-18 Budget, Auto Rental revenue is projected to be approximately $7.191 million. This is $603,700 or 9.2% above the FY 2016-17 Budget and $301,300 or 4.4% above the FY 2016-17 updated forecast. Currently, all of the rental car companies are paying the 10% of gross receipts.

This concession represents 21% of the Airport’s total budgeted non-airline operating revenues.

317 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

Parking Revenue per Enplaned Passenger

Total auto parking and ground transportation revenues of $11.027 million are budgeted to increase 11.2% above the prior year budget and 3.9% above the FY 2016-17 projected revenues.

The increase in revenue from last year’s budget is primarily due to an increase in passenger traffic of 8.1% and a modest increase in revenue per transaction due to higher utilization possibly triggered by improvements in the local economy.

The RTAA has not implemented a parking rate increase since January, 2009.

Auto parking represents 32.2% of the RTAA’s total budgeted non-airline operating revenues.

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RENO-TAHOE AIRPORT AUTHORITY POPULATION IN AIR TRADE AREA FOR THE CALENDAR YEARS 2007-2016 (unaudited)

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Nevada County Churchill 24,891 24,896 24,897 24,877 24,637 24,375 24,063 23,989 24,200 24,198 Douglas 45,406 45,180 45,464 46,997 46,886 46,996 47,118 47,536 47,710 48,020 Humboldt 17,523 17,763 18,260 16,528 16,735 17,048 17,363 17,279 17,019 16,842 Lyon 52,479 53,022 52,641 51,980 51,871 51,327 51,557 51,789 52,585 53,179 Pershing 6,376 6,291 6,286 6,753 6,734 6,749 6,877 6,698 6,634 6,560 Storey 4,193 4,341 4,441 4,010 3,896 3,935 3,942 3,912 3,987 4,051 Washoe 406,079 410,443 414,820 421,407 425,710 429,908 433,731 440,078 446,903 453,616 Carson City 54,939 54,867 55,176 55,274 55,439 54,838 54,080 54,522 54,521 54,742 Subtotal 611,886 616,803 621,985 627,826 631,908 635,176 638,731 645,803 653,559 661,208 California County Alpine 1,145 1,061 1,041 1,175 1,102 1,129 1,159 1,116 1,110 1,071 El Dorado 175,689 176,075 178,447 181,058 180,938 180,561 181,737 183,087 184,452 185,625 Lassen 35,031 34,574 34,473 34,895 34,200 33,658 32,163 31,749 31,345 30,870 Mono 12,801 12,774 12,927 14,202 14,309 14,348 14,074 13,997 13,909 13,981 Nevada 97,027 97,118 97,751 98,764 98,612 98,292 98,200 98,893 98,877 99,107 Placer 332,920 341,945 348,552 348,432 357,138 361,682 367,309 371,694 375,391 380,531 Plumas 20,615 20,275 20,122 20,007 19,765 19,399 18,859 18,606 18,409 18,627 Sierra 3,328 3,263 3,174 3,240 3,113 3,086 3,047 3,003 2,967 2,947 Subtotal 678,556 687,085 696,487 701,773 709,177 712,155 716,548 722,145 726,460 732,759

Total 1,290,442 1,303,888 1,318,472 1,329,599 1,341,085 1,347,331 1,355,279 1,367,948 1,380,019 1,393,967

Percentage increase 2.56% 1.04% 1.12% 0.84% 0.86% 0.47% 0.59% 0.93% 0.88% 1.01%

Unemployment rate Washoe County 4.3% 6.8% 11.1% 12.9% 12.6% 11.0% 9.4% 7.6% 6.3% 5.0%

Source: US Census Bureau - Quickfacts Nevada Department of Employment, Training, and Rehabilitation

http://www.census.gov/quickfacts/table/PST045215/ http://nevadaworkforce.com/CES

319 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

Employment Statistics

The table above demonstrates Nevada’s diversified economy. Continuing diversification of the local economy, as outlined in the Introduction section, will help reduce the impact of any future economic downturns and reduce the dependence on gaming. The chart above shows that employment in the largest sector of the economy. Leisure and Hospitality, the largest category of employment, has shown a 0.9% increase in employment in June 2017 as compared to June 2016.

The largest employment categories with significant year over year growth include the Construction sector of 12.7%, Professional & Business Services of 11.0%, and Other Services of 18.3%. In addition, all other sections of employment registered employment increases.

320 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

Unemployment Statistics

Source: Nevada Department of Employment, Training and Rehabilitation

This graph shows the Reno-Tahoe area unemployment rate of 4.0% in June 2017 as compared to the rest of the state. The Reno - Sparks MSA is usually below not only the Las Vegas statistics for Southern Nevada, but also the state as a whole. During the past year, the Reno-Sparks 2017 unemployment rate has continued to drop as compared to 5.2% in June 2016 and 6.4% in June 2015.

The nationwide unemployment rate at the end of June 2017 registered 4.4% as reported by the Bureau of Labor Statistics.

321 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

Source: U.S. Department of Commerce – Bureau of Economic Analysis www.bea.gov/Regional/Reis

Per Capita Personal Income

Another aspect of Reno-Tahoe area employment is Per Capita Personal Income. As the latest data available as of 2015 demonstrates, the Reno-Tahoe service area of Washoe County, Nevada not only has a higher per capita personal income than the state in general, but also relatively close to the national average per capita personal income level.

322 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

RENO-TAHOE AIRPORT AUTHORITY PRINCIPAL EMPLOYERS WITHIN AIR TRADE AREA FOR THE CALENDAR YEARS ENDED 2016 AND 2007 (unaudited)

Calendar year 2016 Calendar year 2007 Employer Rank Employees Rank Employees

Washoe County School District 1 8,500-8,999 1 7,000-7,499

University of Nevada-Reno 2 4,500-4,999 2 4,000-4,499

Renown Regional Medical Center 3 2,500-2,999 5 2,500-2,999

Washoe County 4 2,500-2,999 3 3,000-3,499

Peppermill Hotel Casino-Reno 5 2,000-2,499 7 2,000-2,499

Grand Sierra Resort & Casino 6 2,000-2,499 - -

International Game Technology 7 1,500-1,999 4 2,500-2,999

Silver Legacy Resort Casino 8 1,500-1,999 6 2,000-2,499

Atlantis Casino Resort 9 1,500-1,999 9 1,500-1,999

St. Mary's Hospital 10 1,500-1,999 - -

Eldorado Hotel & Casino 11 1,000-1,499 10 1,500-1,999

City of Reno 12 1,000-1,499 8 1,500-1,999

www.nevadaworkforce.com/top-employers

323 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

Domestic Airline Passengers

Total Systemwide (Domestic and International) Scheduled Enplanements on U.S. Airlines Passenger numbers in millions (000,000) 2015-2016 2016-2017 Pct. Pct. 2015 2016 Change 2017 Change January 57.8 60.8 5.2 62.6 2.9 February 54.2 58.5 8.0 58.4 -0.2 March 68.2 70.6 3.5 72.7 3.0 April 65.9 67.2 2.0 70.2 4.4 May 68.9 71.5 3.7 June 71.3 74.5 4.5 July 75.6 76.9 1.7 August 72.9 73.5 0.8 September 63.7 66.5 4.3 October 68.7 69.5 1.2 November 64.6 66.6 3.1 December 66.4 66.9 0.8 4 Mo. Total 246.1 257.1 4.5 263.8 2.6 Yr. Total 798.2 823.0 3.1 Source: Bureau of Transportation Statistics, T-100 Market Note: Percent changes based on numbers prior to rounding.

http://www.bts.gov/press_releases/airline_traffic_data.html

The table above lists the last two calendar years of domestic airline passenger enplanements for the United States. The national statistics mirror the two annual passenger peaks for RNO that occur in March/April and July/August each year.

The busiest day in the air travel industry occurs during the Thanksgiving holiday, but November is not a peak air travel month.

324 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 10 – Supplemental Data

Airline Profitability

Quarterly Large Airline Systemwide (Domestic + International) Net Income Ranked by 1Q 2017 Operating Revenue (millions of dollars) Dollar Change 1Q 2Q 3Q 4Q 1Q 1Q2016- Rank Airline 2016 2016 2016 2016 2017 1Q2017 1American 710 972 758 341 263 -447 2Delta 955 1,553 1,269 633 616 -339 3United 314 588 965 397 97 -217 4 Southwest 511 820 388 522 351 -160 5JetBlue 199 180 199 180 85 -114 6Alaska 185 264 265 165 123 -62 7 Hawaiian 53 81 104 3 39 -14 8Spirit 68 85 96 64 47 -21 9SkyWest 28 43 37 -95 28 0 10 Frontier 39 52 79 33 0 -39 10-Carrier Total 3,062 4,638 4,160 2,243 1,649 -1,413 All Passenger Airlines 3,501 5,109 4,207 2,566 2,319 -1,182

Source: Bureau of Transportation Statistics, Form 41; Schedule P1.2

This table lists the latest quarterly operating profit for the Largest Scheduled Passenger Airlines for the most recent five quarters ending with the 1st Quarter of 2017.

The top 10 airlines, ranked by operating revenue, reported an after-tax net profit of $1.6 billion in the first quarter of 2017, down 46.1% from a profit of $3.1 billion in the first quarter of 2016 and down 26.5% from a profit of $2.2 billion in the fourth quarter of 2016.

While fuel costs are down 17% in 2016 as compared to the prior year, the airlines have focused their improving cash flows on increasing employment and wages, retiring debt, acquiring new aircraft, upgrading facilities, expanding Wi-FI and deploying more seats.

Full-time equivalent (FTE) employment at U.S. passenger airlines reached over 411,100 jobs in 2016, the highest level since 2007.

These top 10 airlines carried 83.1% of US airlines’ scheduled service passengers in the first quarter of 2017 and accounted for 71.1% of the scheduled passenger airline after-tax net profit.

325 









   Section 11 – State of Nevada Budget Format Nevada Department of Taxation 1550 College Parkway, Suite 115 Carson City, NV 89706-7921

Reno-Tahoe Airport Authority herewith submits the FINAL budget for the fiscal year ending June 30, 2018

This budget contains 0 funds, including Debt Service, requiring property tax revenues totaling $ 0

The property tax rates computed herein are based on preliminary data. If the final state computed revenue limitation permits, the tax rate will be increased by an amount not to exceed 0 If the final computation requires, the tax rate will be lowered.

This budget contains 0 governmental fund types with estimated expenditures of $ 0 and 1 proprietary fund with estimated expenses of $ 78,337,439

Copies of this budget have been filed for public record and inspection in the offices enumerated in NRS 354.596 (Local Government Budget and Finance Act).

CERTIFICATION APPROVED BY THE GOVERNING BOARD

I Richard G. Gorman William Eck (Printed Name) Chief Financial Officer Shaun Carey (Title) certify that all applicable funds and financial Jennifer Rose operations of this Local Government are listed herein Jerry Hall

Lisa Gianoli Signed Richard G. Gorman Jessica Sferrazza

Dated: 5/18/2017 Rick Murdoch

Andy Wirth

SCHEDULED PUBLIC HEARING:

Date and Time 5/18/17 - 9 AM Publication Date 5/9/2017

Place: Reno Tahoe Airport Authority - Board Room

Page: _1_____ Form 1 11/1/2014

326 FULL TIME EQUIVALENT EMPLOYEES BY FUNCTION

ACTUAL ESTIMATED PRIOR YEAR CURRENT YEAR BUDGET YEAR ENDING 06/30/16 ENDING 06/30/17 ENDING 06/30/18 General Government Judicial Public Safety Public Works Sanitation Health Welfare Culture and Recreation Community Support

TOTAL GENERAL GOVERNMENT Utilities Hospitals Transit Systems Airports 249.5 272.5 277.5 Other

TOTAL 249.5 272.5 277.5

POPULATION (AS OF JULY 1) 441,946

SOURCE OF POPULATION ESTIMATE* Preliminary revenue

Assessed Valuation (Secured and Unsecured Only) Net Proceeds of Mines TOTAL ASSESSED VALUE

TAX RATE General Fund Special Revenue Funds Capital Projects Funds Debt Service Funds Enterprise Fund Other

TOTAL TAX RATE

* Use the population certified by the state in March each year. Small districts may use a number developed per the instructions (page 6) or the best information available.

RENO-TAHOE AIRPORT AUTHORITY (Local Government)

SCHEDULE S-2 - STATISTICAL DATA

Page: 2 Form 4 11/1/2014 327

SCHEDULE A-2 PROPRIETARY AND NONEXPENDABLE TRUST FUNDS

Budget For Fiscal Year Ending June 30, 2018 Budget Summary for RENO-TAHOE AIRPORT AUTHORITY (Local Government)

OPERATING OPERATING NONOPERATING NONOPERATING OPERATING TRANSFERS REVENUES EXPENSES REVENUES EXPENSES NET INCOME FUND NAME (1) (2)** (3) (4) IN (5) OUT(6) (7)

AIRPORTS E $ 50,362,735 $ 77,850,139 11,455,200 (487,300) 0 0 $ (16,519,504) 328

TOTAL

* FUND TYPES: E - Enterprise I - Internal Service N - Nonexpendable Trust Page: 3 SCHEDULE A-2 *" Include Depreciation (1) (2) (3) (4) BUDGET YEAR ENDING 06/30/18 ESTIMATED ACTUAL PRIOR CURRENT PROPRIETARY FUND YEAR ENDING YEAR ENDING TENTATIVE FINAL 6/30/2016 6/30/2017 APPROVED APPROVED OPERATING REVENUE Landing and Aircraft Fees $ 8,071,097 $ 8,481,346 $ 9,537,704 $ 9,537,704 Gaming Concession 1,071,402 949,200 977,700 977,700 Food & Beverage Concession 992,984 1,090,600 1,149,300 1,149,300 Merchandise Concession 978,926 1,074,100 1,111,000 1,111,000 Auto Rental Concession 6,570,902 6,889,500 7,190,800 7,190,800 Parking/Ground Transportation 10,519,785 10,891,500 11,330,900 11,330,900 Rents 13,599,106 14,923,350 15,165,450 15,212,150 Other Concessions/Reimbursed Svcs/Misc. 3,709,713 3,991,548 3,852,799 3,853,181 Total Operating Revenue $ 45,513,916 $ 48,291,144 $ 50,315,653 $ 50,362,735

OPERATING EXPENSE Personnel Services $ 25,007,616 $ 27,135,790 $ 28,821,790 $ 28,843,415 Utilities and Communications 2,540,504 2,660,400 2,741,145 2,741,145 Purchased Services 4,803,679 5,079,354 5,662,568 5,731,568 Materials and Supplies 1,821,369 1,884,955 1,973,113 1,949,869 Administrative Expenses 2,443,771 2,856,851 2,833,862 2,834,142 Depreciation/Amortization 34,613,731 35,000,000 35,750,000 35,750,000 Total Operating Expense $ 71,230,670 $ 74,617,350 $ 77,782,478 $ 77,850,139

Operating Income or (Loss) (25,716,754) (26,326,206) (27,466,825) (27,487,404)

NONOPERATING REVENUES (EXPENSES) Interest Earned 694,721 426,000 566,300 565,900 Jet Fuel Tax Revenue 268,287 272,300 276,400 276,400 PFC Revenues (Passenger Facility Chg.) 6,740,165 6,992,300 7,269,000 7,269,000 Gain (Loss) on sale of capital assets 105,471 - 1,850,000 1,850,000 Customer Facility Charge 1,385,061 1,437,000 1,493,900 1,493,900

Interest Expense (1,284,053) (616,855) (487,300) (487,300) Miscellaneous Non-Operating Expense (140,952)

Total Nonoperating Revenues (Expenses) 7,768,700 8,510,745 10,968,300 10,967,900

Net Income before Operating Transfers $ (17,948,054) $ (17,815,461) $ (16,498,525) $ (16,519,504)

Operating Transfers (Schedule T) In

Out Net Operating Transfers 0 0 0 0

NET INCOME $ (17,948,054) $ (17,815,461) $ (16,498,525) $ (16,519,504)

RENO-TAHOE AIRPORT AUTHORITY (Local Government)

SCHEDULE F-1 REVENUES, EXPENSES AND NET INCOME

FUND AIRPORTS

Page: 4 329 11/1/2014 (1) (2) (3) (4) BUDGET YEAR ENDING 06/30/18 ESTIMATED ACTUAL PRIOR CURRENT PROPRIETARY FUND YEAR ENDING YEAR ENDING TENTATIVE FINAL 6/30/2016 6/30/2017 APPROVED APPROVED

A. CASH FLOWS FROM OPERATING ACTIVITIES:

Operating Income (Loss) $ (25,716,754) $ (26,326,206) $ (27,466,825) $ (27,487,404) Depreciation/Amortization 34,613,731 35,000,000 35,750,000 35,750,000 Provision for Bad Debt - - Loss on Sale of Property and Equipment - - Changes in Current Assets and Liabilities (37,676) (500,000) - - a. Net cash provided by (or used for) operating activities 8,859,301 8,173,794 8,283,175 8,262,596

B. CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Jet Fuel Tax Revenue 268,287 272,300 276,400 276,400 b. Net cash provided by (or used for) non capital financing activities 268,287 272,300 276,400 276,400

C. CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:

Federal Grant Proceeds 9,851,206 8,259,826 19,888,264 19,888,264 Proceeds from sale of Capital Assets 106,967 - 1,850,000 1,850,000 Customer Facility Charge Revenue 1,385,061 1,437,000 1,493,900 1,493,900 Acq. & Const. of Capital Assets (16,000,642) (18,981,042) (32,647,384) (33,824,260) Principal/Interest Payments (26,409,844) (5,388,855) (2,247,300) (2,247,300) Receipts of PFC Revenue 6,740,165 6,992,300 7,269,000 7,269,000 Senior Lean Notes 20,549,048 - c. Net cash by (or used for) capital and related financing activities (3,778,039) (6,874,583) (4,393,520) (4,478,520)

D. CASH FLOWS FROM INVESTING ACTIVITIES:

Receipt of Interest 391,513 426,000 566,300 565,900 Purchase/Sale of Investments (8,149,592) (4,000,000) (4,000,000)

d. Net cash provided by (or used in) investing activities (7,758,079) 426,000 (3,433,700) (3,434,100)

NET INCREASE (DECREASE) in cash and cash equivalents (a+b+c+d) (2,408,530) 1,997,511 732,356 626,377

CASH AND CASH EQUIVALENTS AT JULY 1, 20XX 19,763,171 17,354,641 19,352,152 19,352,152

CASH AND CASH EQUIVALENTS AT AT JUNE 30, 20XX $ 17,354,641 $ 19,352,152 $ 20,084,508 $ 19,978,529

RENO-TAHOE AIRPORT AUTHORITY

Schedule F - 2 - Statement of Cash Flows

FUND: AIRPORTS

Page: 5 Form 20 11/1/2014 330 ALL EXISTING OR PROPOSED * - Type 6 - Medium-Term Financing - Lease Purchase GENERAL OBLIGATION BONDS, REVENUE BONDS, 1 - General Obligation Bonds 7 - Capital Leases MEDIUM-TERM FINANCING, CAPITAL LEASES AND 2 - G.O. Revenue Supported Bonds 8 - Special Assessment Bonds SPECIAL ASSESSMENT BONDS 3 - G.O. Special Assessment Bonds 9 - Mortgages 4 - Revenue Bonds 10- Other (Specify Type) 5 - Medium-Term Financing 11- Proposed (Specify Type)

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) REQUIREMENTS FOR FISCAL BEGINNING YEAR ENDING 06/30/18 (9) + (10) ORIGINAL FINAL OUTSTANDING NAME OF BOND OR LOAN AMOUNT OF ISSUE PAYMENT INTEREST BALANCE INTEREST PRINCIPAL List and Subtotal By Fund TERM ISSUE DATE DATE RATE 7/1/2017 PAYABLE PAYABLE TOTAL FUND: AIRPORTS RTAA, AIRPORT REVENUE REFUNDING BONDS SERIES 2015 4 11 20,690,000 10/01/15 07/01/26 2.75% 17,720,000 487,300 1,760,000 2,247,300

TOTAL ALL DEBT SERVICE $ 20,690,000 $ 17,720,000 $ 487,300 $ 1,760,000 $ 2,247,300 331

SCHEDULE C-1 INDEBTEDNESS

RENO-TAHOE AIRPORT AUTHORITY Budget Fiscal Year 2017-18

Page: 6 Form 22 11/1/2014

SCHEDULE OF EXISTING CONTRACTS Budget Year 2017 - 2018 Local Government: Reno-Tahoe Airport Authority Contact: Alex Kovacs E-mail Address: akovacs(@renoairportcom Daytime Telephone: 775-328-6435 Total Number of Existing Contracts: 80

Effective Termination Proposed Proposed Date of Date of Expenditure Expenditure Line Vendor Contract Contract FY 2017-18 FY 2018-19 Reason or need for contract: 1 Fennemore Craig Jones Vargas 2/1/2014 1/30/2019 $ 425,000 $ 425,000 Legal Services 2 McDonald Carona Wilson 10/1/2012 9/30/2017 $ 72,000 $ 72,000 Local/State Lobbying & Government Advocacy 3 The Porter Group 2/1/2011 1/31/2019 $ 84,000 $ 84,000 Federal Representation Services 4 Duo, LLC 7/1/2017 6/30/2018 $ 30,000 $ 30,000 Data Source for Air Service Dept needs 5 Walker & Associates, LLC 7/1/2017 6/30/2018 $ 50,000 $ - Air Service Meetings and Analysis 6 Reno Air Racing Association 8/12/2015 9/20/2015 $ 75,000 $ 75,000 National Championship Air Race Sponsorship 7 University of Nevado-Reno 7/1/2015 6/30/2016 $ 38,930 $ 36,000 Intercollegiate Athletics Trade Out Agreement 8 OnStrategy 7/1/2016 6/30/2017 $ 35,000 $ 5,000 Strategic Planning 9 CDS Group Health 7/1/2014 On-going $ 11,750 $ 12,000 Third Party Administration Services (Dental Claims) 10 Insurance Consultant 7/1/2017 6/30/2022 $ 47,000 $ 49,000 Insurance Brokerage Services

332 11 My Cafeteria Plan 1 /1/2017 12/31/2017 $ 6,500 $ 6,600 Third Party Administration Services (HRA/HSA/Flex Plan Claims) 12 Personal Development Consultants 9/4/1987 On-going $ 10,000 $ 10,000 Employee Assistance Program Services 13 Hometown Health Plan 1/1/2017 1 2/31/201 8 $ 2,552,000 $ 2,780,000 Employee Health Benefit Plan 14 Symetra Financial 7/1/2016 12/31/2017 $ 139,000 $ 140,500 Employee Life & Long Term Disability Benefit Plans 15 Vision Service Plan 7/1/2017 12/31/2019 $ 5,300 $ 5,500 Third Party Administration Services (Vision Claims) 16 Ionwave Technologies 7/1/2015 6/30/2018 $ 18,000 $ 18,750 E-Procurement License, Maintenance and Professional Services 17 ABC Fire 7/1/2017 6/30/2018 $ 5,150 $ 5,165 Annual Fire System Inspections, quarterly inspections 18 ABM Janitorial 7/1/2017 6/30/2018 $ 12,600 $ 13,000 All terminal cleaning requirements 19 ADT / TYCO 7/1/2017 6/30/2018 $ 4,820 $ 4,900 Quarterly Fire Alarm Service Hangars 5 & 6, Shop 20 All Weather, Inc. 7/1/2017 6/30/2018 $ 650 $ 660 NA DIN service for AWOS 21 Burgarello Alarm 7/1/2017 6/30/2018 $ 450 $ 465 Alarm Monitoring new terminal 22 Emerson Network Power 7/1/2017 6/30/2018 $ 7,500 $ 7,500 Required Terminal UPS 23 Kane Elevator service 7/1/2017 6/30/2018 $ 2,100 $ 2,350 Required elevator maintenance, service and testing 24 LA Perks 7/1/2017 6/30/2018 $ 350 $ 365 Required recertification of wash rack alarm 25 Safety Kleen 7/1/2017 6/30/2018 $ 960 $ 975 PT'S OSHA required parts washer service 26 Simplex Grinnell 7/1/2017 6/30/2018 $ 475 $ 485 Fire pump annual inspection and certification 27 Waters Septic Service 7/1/2017 6/30/2018 $ 1,150 $ 1,175 Permit and Pump oil/water separators Maint shop and wash rack 28 Crowe I-lorwath 3/13/2014 3/31/2019 $ 53,370 $ 53,710 External Audit Services 29 US Bank 5/23/2013 7/1/2018 $ 8,500 $ 5,000 Bond and Note Trustee 30 Government Portfolio Advisors 7/1/ 2017 6/30/2022 $ 38,000 $ 38,000 Investment Advisory Services 31 Washoe County Investment Pool 5/1/2014 On-going $ 10,000 $ 15,000 Investment Advisory Services 32 Wells Fargo Bank 6/24/2013 7/1/2018 $ 35,125 $ 35,800 Banking Services 33 Wells Fargo Bank 10/24/2013 10/24/2018 $ 220,000 $ 230,000 Merchant Services Credit Card Processing 34 Airport Concession Consultants 2/25/2012 6/30/2018 $ 10,000 $ 10,000 Disadvantaged Business Enterprise (DBE) Compliance 35 Broadbent & Associates 3/1/2016 $ 6,000 $ - PT'S-Land Disposal - National Historic Preservation Act 36 Four Winds Interactive 4/9/2013 4/8/2016 $ 1,300 $ 1,300 Interactive Kiosks Maintenance 37 Qs'. Specialists 11/1/2013 n/a $ 3,000 $ 3,000 Mystery Shopper Program 38 Public Financial Management 10/1/2016 9/30/2017 $ 5,000 $ 5,000 Airport Financial Advisory Services

SCHEDULE OF EXISTING CONTRACTS Budget Year 2017 -2018 Local Government: Reno-Tahoe Airport Authority Contact: Alex Kovacs E-mail Address: akovacsPrenoairport.com Daytime Telephone: 775-328-6435 Total Number of Existing Contracts: 80

Effective Termination Proposed Proposed Date of Date of Expenditure Expenditure Line Vendor Contract Contract FY 2017-18 FY 2018-19 Reason or need for contract: 39 A Natural Sparkle 9/1/2014 On-going $ 5,000 $ 5,000 Janitorial Services for 1280 Terminal Way 40 Atlantic Aviation 1 0/1 8/201 2 On-going $ 73,240 $ 73,240 General Aviation Hangar Management 41 Burgarello Alarm 9/1/2013 On-going $ 3,000 $ 3,000 Alarm monitoring 1200 & 1 250 Terminal Wy. 42 Burgarello Alarm 9/1/2013 On-going $ 1,500 $ 1,500 Alarm monitoring 1280 Terminal Wy. 43 LEI Alarm Monitoring 8/1/2014 On-going $ 800 $ 800 Burgular Alarm Monitoring for Mini-Warehouse 44 IT Heating & Aire On-going $ 3,500 $ 3,700 1 280 Terminal Way HVAC equipment- quarterly maintenance 45 Martin-Ross Security On-going $ 2,100 $ 2,100 Security Gate Monitoring for Airport Mini Warehouse 46 Quality 1 Lawn & Landscaping 1/1/2016 On-going $ 2,000 $ 2,200 Landscaping Service for 1 280 Terminal Wy. 47 Quality 1 Lawn & Landscaping 10/31/2015 On-going $ 3,500 $ 3,700 Snow Removal Mini Warehouse 48 Custom Aire On-going On-going $ 1,900 $ 2,100 Mini Warehouse HVAC equipment - quarterly maintenance 49 Western Exterminator 10/1/2015 On-going $ 1,100 $ 1,100 Pest Control Service for Airport Mini Warehouse

333 50 Console Cleaning Specialists 7/1/2017 6/30/2018 $ 3,400 $ 3,500 Console Cleaning and Preventative Maintenance Service 51 USDA - APHIS 7/1/2017 6/30/2018 $ 50,445 $ 52,967 Part 139 Wildlife Hazard Management Program 52 Washoe County Technology Service 7/1/2016 n/a $ 60,739 $ 60,739 Radio System and Equipment Repair 53 Scheidt and Bachmann 3/1/2013 2/28/2018 $ 287,143 $ - Parking Revenue Control System Maintenance Agreement 54 LEIDS 3/16/2011 n/a $ 6,000 $ 6,000 Laundry Service 55 AAAE - Transportation Security Clearance 8/8/2014 8/31/2016 $ 18,000 $ 18,000 Provide TSA required fingerprint channeling service 56 AEEC 1/1/2017 12/30/2017 $ 182,641 $ 180,000 Stead Consent Decree Remediation 57 Mead & Hunt, Inc. 9/28/2016 1/28/2018 $ 950,000 $ 561,551 Consultant Services - Reno-Tahoe International Airport Master Plan Study 58 Arora Engineers, Inc. 6/5/2014 6/4/2017 $ 100,000 $ Electronic Airport Layout Plan and GIS Development 59 Bob Firth 7/1/2017 6/30/2018 $ 4,000 $ 4,000 Water Rights 60 Sierra Environmental Monitoring 7/1/ 2017 6/30/2018 $ 8,622 $ 9,300 Stormwater Sampling 61 Waters Vacuum Truck Service 7/1/2017 6/30/2018 $ 15,375 $ 16,144 Maintain sand/oil separators including pumping & permitting 62 Granite Construction 11/1/2016 4/30/2017 $ - $ - On-Call Snow Removal 63 Par Electric Contractors 11/1/2016 4/30/2017 $ - $ - On-Call Snow Removal 64 ATC Control Services-EMS 7/1/2017 6/30/2018 $ 6,500 $ 6,500 Specialized training and equipment expertise 65 Building Control Services 7/1/ 2017 6/30/2018 $ 1,250 $ 1,250 Specialized equipment repair expertise 66 Chemtreat International-Cooling Towers 7/1/2017 6/30/2018 $ 6,500 $ 6,800 Cooling Tower Equipment and chemical servicing 67 Delta Fire and Cylinder Service 7/1/2017 6/30/2018 $ 28,000 $ 28,000 State certification requirements 68 Emerson Network Power-UPS 7/1/ 2017 6/30/2018 $ 58,000 $ 50,000 Specialized training and equipment servicing 69 ,TBT Aerospace-Jetbridges 7/1/2017 6/30/2018 $ 30,000 $ 30,000 Jetbridge Specialized Repair and Service 70 Johnson Controls-BC5 7/1/ 2017 6/30/2018 $ 16,000 $ 16,500 Specialized training and equipment service 71 KONE Elevator-Escalator 7/1/2017 6/30/2018 $ 103,000 $ 105,000 State certification requirement 72 WOW Cleaning 7/1/ 2017 6/30/2018 $ 197,000 $ 197,000 Heavy duty cleaning services and equipment 73 ADT Alarm Services- GA0B Building 7/1/2017 6/30/2018 $ 2,500 $ 2,500 Security monitoring to support outlying RTAA facilities 74 Stanley Access-Certified door Service 7/1/2017 6/30/2018 $ 10,000 $ 10,000 Specialized equipment and repair service 75 Tennant Sales and Service 7/1/2017 6/30/2018 $ 15,000 $ 15,000 Specialized training and equipment service- Scrubbers 76 Trane Company 7/1/2017 6/30/2018 $ 53,000 $ 55,000 Specialized equipment repair and service-Chillers

SCHEDULE OF EXISTING CONTRACTS Budget Year 2017 - 2018 Local Government: Reno-Tahoe Airport Authority Contact: Alex Kovacs E-mail Address: akovacsArenoairport.com Daytime Telephone: 775-328-6435 Total Number of Existing Contracts: 80

Effective Termination Proposed Proposed Date of Date of Expenditure Expenditure Line Vendor Contract Contract FY 2017-18 FY 2018-19 Reason or need for contract: 77 Eliteline Services-BHS 7/1/2017 6/30/2018 $ 892,385 $ 908,448 Baggage Handline System (81-15) Equipment service and repair 78 RFI Security Camera Services-BUS 7/1/2017 6/30/2018 $ 30,000 $ 31,000 Specialized Camera and Equipment services 79 Arthur .T. Gallagher 2/1/2014 6/30/2019 $ 65,500 $ 67,500 Property/Casualty & Workers Compensation Brokerage Services 80 Puliz Records Management On-going On-going $ 15,000 $ 15,000 Records Storage

Total Proposed Expenditures $ 7,339,620 $ 6,739,339

Additional Explanations (Reference Line Number and Vendor):

Page: 7 Form 31 334 1/20/2015 SCHEDULE OF EXISTING CONTRACTS Budget Year 2016 - 2017 Local Government: Reno-Tahoe Airport Authority Contact: Alex Kovacs E-mail Address: akovacsArenoairport.com Daytime Telephone: 775-328-6435 Total Number of Privatization Contracts: 2

Number of Equivalent FTEs hourly wage employed of FTEs by Effective Termination Duration Proposed Proposed Position by Position Position Date of Date of (Months/ Expenditure Expenditure Class or Class or Class or Line Vendor Contract Contract Years) FY 2017-18 FY 2018-19 Grade Grade Grade Reason or need for contract: 1 WOW Cleaning Corporation 7/1/2017 6/30/2018 12 Months $ 189,600 $ 189,600 18 6 17.3 Heavy duty cleaning services and equipment

2 WOW Cleaning Corporation 7/1/2017 6/30/2018 12 Months $ 3,600 $ 3,600 26 2 21.08 Specialized high glass cleaning

3 335 4

5

6

7

8 Total

Attach additional sheets if necessary.

Page: 8 Form 32 1/20/2015

Section 12 – Acronym and Glossary Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 12 – Acronym and Glossary

ACRONYMS DEFINITIONS And TERMS

RTAA Reno-Tahoe Airport Authority RNO Reno-Tahoe International Airport RTIA Reno-Tahoe International Airport RTS Reno-Stead Airport

Airlines AS Alaska Airlines G4 Allegiant Airlines AA American Airline DL Delta Air Lines F9 Frontier Airlines QX Horizon Air B6 JetBlue WN Southwest Airlines UA United Airlines Y4 Volaris Airlines

Airport Codes BOI Boise MDW Chicago Midway ORD Chicago O'Hare DFW Dallas Fort Worth DAL Dallas Love Field DEN Denver GDL Guadalajara IAH George Bush Intercontinental LAS Las Vegas LGB Long Beach LAX Los Angeles MSP Minneapolis/St Paul JFK OAK Oakland PHX Phoenix

336 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 12 – Acronym and Glossary

PDX Portland SLC Salt Lake City SAN San Diego SFO San Francisco SJC San Jose SEA Seattle

Regulations 77 FAA Part 77 Imaginary Protection Services 107 FAA Part 107 – A section of the Federal Aviation Regulations having to do with an airport operator’s responsibilities for airport security. 139 FAA Part 139 – A section of the Federal Aviation Regulations having to do with the certification of an airport’s airfield. 150 FAA Part 150 Study – A noise study defined by a section of the Federal Aviation Regulations, that when completed, makes an airport eligible for noise insulation and related land acquisition grants. The Study produces two documents, the Noise Exposure Map and the Noise Compatibility Program. 333 Code of Federal Regulations Section for Exempting a Commercial UAS from needing a COA 1542 TSA Part 1542, Airport Security

All Other A/E Architect/Engineer AAA American Arbitration Association – Arbitrators are required under some collective bargaining agreements AAAE American Association of Airport Executives AAE Accredited Airport Executive AAPOPA Airport Authority Police Officers Protective Association AC Asphaltic Concrete AC FAA Advisory Circular ACA Affordable Care Act ACAMS Access Control and Alarm Monitoring System ACEP Airport Capacity Enhancement Plan ACI-NA Airports Council International - North America

337 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 12 – Acronym and Glossary

ACIP Airport Capital Improvement Program for FAA ACL Aviation Classics Ltd. - Reno-Stead Airport ACM Airport Certification Manual ACN Aircraft Certification Number ACR Aircraft Condition Report Accrual Basis of Accounting Recognizing revenue when it is earned and recognizing expenses in the period incurred, without regard to the time of receipt or payment of cash. ADA Americans with Disability Act - U.S. law governing employment and treatment of persons with a qualified disability ADAAP Americans with Disabilities Act Advisory Panel ADG Airplane Design Group ADPM Average Day Peak Month ADO FAA Airport District Office AEP Airport Emergency Plan AFV Alternative Fuel Vehicles AFFF Aqueous Film Forming Foam AGL Above Ground Level AIM Aeronautical Information Manual AIP Airport Improvement Program - A Federal Aviation Administration program periodically reauthorized by Congress which distributes the proceeds of the federal tax on airline tickets to airports through grants for eligible construction projects and land acquisition. AirCom Airport Communications Center Aircraft Operation The landing or take off of an aircraft.

Airline Load Factor The percentage of seats occupied on an aircraft.

Airline Yield per Mile Airlines’ ticket revenues for a given airport divided by the air miles flown to that airport for those tickets. Airside The airfield side of an airport used by aircraft, runways, taxiways, and aircraft parking aprons. AKA Also Known As ALP Airport Layout Plan - A blue print of an airport required by the Federal Aviation Administration which shows current and future airport development.

338 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 12 – Acronym and Glossary

ALPA Air Line Pilots Association ALS Approach Lighting Systems AMASS Airport Movement Area Safety Systems - Federal Aviation Administration Program for runway incursions Amortization A term that refers either to the gradual paying off of a debit in regular installments over a period of time or to the depreciation of an asset over a period of time. AMP Airport Master Plan AMSL Above Mean Sea Level ANCA Airport Noise and Capacity Act of 1990 ANTN Airport News & Training Network (AAAE) ANOMS Aircraft Noise and Operations Monitoring System ANAP Airport Noise Advisory Panel AOA Air Operations Area AOPA Aircraft Owners and Pilots Association APU Auxiliary Power Unit ARC Airport Reference Code ARFF Aircraft Rescue and Fire Fighting ARP Airport Reference Point ARSA Airport Radar Service Area ARTS Automated Radar Terminal System ASDA Accelerate Stop Distance Available ASDE Airport Surface Detection Equipment Asset A single item of ownership having exchange value. AFSD Assistant Federal Security Director ASM Available Seat Mile ASOS Automated Surface Observing System ASR Airport Surveillance Radar ATA Air Transport Association ATC Air Traffic Control ATCT Airport Traffic Control Tower ATIS Automated Terminal Information System ATO Airline Ticket Office ARTCC Air Route Traffic Control Center ATSI Airport Training & Safety Institute (AAAE) AUVSI Association of Unmanned Vehicle Systems International

339 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 12 – Acronym and Glossary

AVA Airport Vassar Annex AVGAS Aviation Gasoline AVIS Automatic Vehicle Identification System - An electronic system that counts vehicle entrances, exits and dwell time at a location. AWOS Automated Weather Observing System AWP FAA's Western Pacific Region Balanced Budget A budget in which receipts are equal to or greater than outlays. A further test for the RTAA is that Net Pledged Revenues must exceed 125 percent of that year’s revenue bond debt service. BCS Building Control System BHS Baggage Handling System BIDS Baggage Information Displays System - Electronic displays to inform passengers which baggage conveyor will be used for their flight’s luggage. BLM Bureau of Land Management BMP Best Management Practices BMU Bag Make-Up Bond A security issued by a corporation or public body and usually carrying a fixed rate of interest and a set date, called the bond’s maturity, for redemption of the principal. Bond Covenant An agreement with the bond holders, which defines, among other things, the priority of the payment of debt service in the use of revenues. BRL Building Restriction Line Budget An estimate, often itemized, of expected income and expense for a given period in the future. CAD Computer Aided Dispatch CADD Computer Aided Design and Drafting CAFR Comprehensive Annual Financial Report CALCS Computerized Airfield Lighting Control System CAP Civil Air Patrol Capital Project Construction projects that will have a useful life exceeding one year and a cost greater than $5,000 and are paid under multiple invoices. These projects may be done either in-house or by an outside contractor. CASM Cost per Available Seat Mile

340 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 12 – Acronym and Glossary

CAT Instrument Landing System Category - Category I, II, III CATEX Categorical Exclusion

CBA Collective Bargaining Agreement - Written contract or agreement between the employee and a recognized employee organization CBP Customs and Border Protection CD Calendar Days CCR Central Control Room (for BHS) CCTV Closed Circuit Television - Video cameras used for surveillance to maintain security and safety. CTAF Common Traffic Advisory Frequency CE Civil Engineer CFR Code of Federal Regulations CIP Capital Improvement Project (in airport budget) COA Certificate of Authorization - form of approval for UAS operations COBRA Consolidated Omnibus Budget Reconciliation Act of 1985 - Benefit granted to employees to continue their health and other benefit coverage after terminating employment for a specified period of time. COC Community Outreach Committee CPA Certified Public Accountant CPI Consumer Price Index CM Construction Management CMAQ Congestion Mitigation Air Quality CNG Compressed Natural Gas COLA Cost of Living Adjustment Competition Plan A plan required by the FAA of large and medium hub airports at which 50 percent or more of their passengers are handled by two or fewer airlines. Compensatory Rate Setting Compensatory rate setting is one in which a sponsor assumes all liability for airport costs and retains all airport revenue for its own use. Aeronautical users are charged only for the costs of the facilities they use. A compensatory rate structure may be imposed on users by ordinance.

341 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 12 – Acronym and Glossary

Cost Centers Geographic locations on an airport such as the airfield or terminal building used for rate setting purposes. CPE Cost Per Enplanement – The airlines’ airport costs, landing fees and rents, divided by the total number of passengers enplaned at the airport. CRJ Canadair Regional Jet CSP Civil Service Plan CT Circuit Tester CUTE Common Use Terminal Equipment CVR Cockpit Voice Recorder “Black Box” CY Calendar Year DAD Deputy Area Director (Transportation Security Administration/TSA) dB Decibel Daily Departure Seats The total of all the seats on all the scheduled airline flights leaving an airport each day.

DBE Disadvantaged Business Enterprise - The Department of Transportation (DOT) has a policy of helping small businesses owned and controlled by socially and economically disadvantaged individuals, including minorities and women, in participating in contracting opportunities created by DOT financial assistance programs. At airports, DBE’s are encouraged to participate in airport concession programs and FAA grant funded projects. DEIS Draft Environmental Impact Statement Depreciation A non-cash expense that accounts for the value of assets which decreases over time as a result of use, age, or obsolescence. DGPS Differential Global Positioning System DH Decision Height DHS Department of Homeland Security DME Distance Measuring Equipment DNL Day-Night Equivalent Sound Level - Also called LDN DP Deplaning Passenger -An arriving passenger. DRI Desert Research Institute DVR Digital Video Recorder EA Environmental Assessment EAP Employee Assistance Program

342 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 12 – Acronym and Glossary

EAS Essential Air Service EDS Explosive Detection System - TSA screening equipment EIS Environmental Impact Statement EEO Equal Employment Opportunity EEOC U.S. Equal Employment Opportunity Commission - Agency that enforces various laws i.e., Civil Rights and ADA ELS Elite Line Service (BHS Maintenance Contractor) - Contractor that provides Operations and Maintenance on the BHS ELT Emergency Locator Transmitter EMRB Employee Management Relations Board - State of Nevada EMS Environmental Management System EOC Emergency Operations Center Enterprise Fund A form of accounting that utilizes a separate fund or cost center for a specific purpose. Enterprise fund expenditures are generally paid by the revenues generated within the operation of that purpose. EP Enplaned Passenger - A departing passenger. EPA Environmental Protection Agency EP Enplaned Passengers ESS Employee Self Service ETD Explosive Trace Detection - TSA Screen Equipment Expenditure The act of expending something, especially funds; disbursement; consumption. FAA Federal Aviation Administration (FAA) – A component of the Department of Transportation with primary responsibility for the safety of civil aviation. FAR Federal Aviation Regulations FBI Federal Bureau of Investigation FBO Fixed Base Operator – Businesses on airports that sell fuel to private plane owners, provide aircraft parking, as well as aircraft maintenance and mechanical services. FCAD Facility Condition Assessment Database FCC Federal Communication Commission FDR Flight Data Recorder “Black Box” FEIS Final Environmental Impact Statement FEMA Federal Emergency Management Agency

343 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 12 – Acronym and Glossary

FIDS Flight Information Displays System - Electronic displays to inform passengers of the status of their flight, such as arrival time, and terminal building gate number. FIS Federal Inspection Service FLOW Passengers Connecting FLSA Fair Labor Standards Act - U.S. Law governing computation and payment of overtime and regulating child labor FMCS U.S. Federal Mediation and Conciliation Service - A source of mediator and arbitrators required under some collective bargaining agreements FMLA Family and Medical Leave Act— U.S. law governing requirements for Leave Granting FOD Foreign Object Debris or trash on the airfield. FONSI Finding of No Significant Impact FSD Federal Security Director FSDO Flight Standards District Office FSS Flight Service Station FTE Full Time Equivalent - PTE is Part Time Equivalent FTZ Foreign Trade Zone FY Fiscal Year – A 12 month period, other than a calendar year, used for financial reporting purposes. The RTAA’s fiscal year begins July 1st and ends June 30th. GA General Aviation- The activities of privately owned aircraft that are not used for commercial purposes, such as the movement of passengers or freight. GAAP General Accepted Accounting Principles GAO U.S. General Accounting Office GFOA Governmental Finance Officers Association GNSS Global Navigation Satellite System GOED Governor’s Office of Economic Development GPS Global Positioning System GPU Ground Power Unit GSE Ground Service Equipment GT Ground Transportation HAN Hot August Nights HIRL High Intensity Runway Lights - (Medium Intensity MIRL)

344 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 12 – Acronym and Glossary

HIPAA Health Insurance Portability & Accountability Act HRA Health Reimbursement Account HSA Health Savings Account HVAC Heating Ventilation and Air Conditioning Hybrid Rate Setting A combination of the “residual” and “compensatory” methods of airline rate calculation. IATA International Air Transport Association ICAO International Civil Aviation Organization ICS Incident Command System IFR Instrument Flight Rules ILS Instrument Landing System IMC Instrument Meteorological Conditions INM Integrated Noise Model Jet Bridge A mechanical tunnel used by passengers to pass from the terminal building to an aircraft. K9 Police Working Dog KCM Known Crew Member KKOH Radio AM 780 KOLO TV 8 (ABC Affiliate) KRNV TV 4 (NBC Affiliate) KTVN TV 2 (CBS Affiliate) KREN TV 27 (Univision, Spanish programming) KSA Knowledge, Skills and Abilities L3 Manufacturer of TSA provided screening equipment LAN Local Area Network (computer network system) Landed Weight The maximum gross certificated landed weight of an aircraft, or all aircraft landing at an airport in a fiscal year, which is not dependent on the number of passengers on board. Landing Fee The rate charged by an airport to commercial aircraft operators per thousand pounds of landed weight. Landside All areas of land owned and maintained by the RTAA outside of the airfield areas perimeter fence. LCC Life Cycle Costs

345 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 12 – Acronym and Glossary

LCD Liquid Crystal Display; flat-panel, large-format displays - Flat panel displays for use at the checkpoints and FIDS/BIDS locations LDA Landing Distance Available LED Light-Emitting Diode LEO Law Enforcement Officer LMR Labor Management Relations LOA Letter of Agreement LOC Letter of Credit LOC Localizer LOI Letter of Intent LPG Liquefied Propane Gas LVIED Large Vehicle Improvised Explosive Device MAG Minimum Annual Guarantee - A minimum amount to be paid by an airport concessionaire. Concessionaires pay the greater of the minimum annual guarantee or a percentage of their gross revenues. MALSF Medium-Intensity Approach Lighting Systems with Sequence Flashers MALSR Medium-Intensity Approach Lighting System with Runway Alignment Indicator MDA Minimum Descent Altitude Medium Hub Airport An airport defined by the Federal Aviation Administration as handling 0.25% to 1% of the country’s annual passenger boardings. MGT Management Guidelines MII Majority In Interest - A method, defined in an airport’s airline agreement, of determining an airline majority for purposes of approving capital projects. MISER Hangar development on west side of ramp at Reno-Stead Airport MOA Military Operations Area MOU Memorandum of Understanding MOU/A Memorandum of Understanding/Agreement MSA Minimum Safe Altitude MRO Maintenance and Repair Overhaul MVA Minimum Vectoring Altitude NAE Nevada Association of Employers

346 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 12 – Acronym and Glossary

NANG Nevada Air National Guard NASA National Aeronautics and Space Administration NATCA National Air Traffic Controllers Association NAVAIDS Navigational Aids (FAA equipment) NCAR National Championship Air Races NCIC National Crime Information Center NCP Noise Compatibility Plan NDA National Defense Area NDOT Nevada Department of Transportation NEM Noise Exposure Map NEPA National Environmental Policy Act Net Pledged Revenues Operating Revenues less Operating Expenses pledged to pay debt service as defined in a bond covenant. Net Win The difference between gaming wins and losses before deducting costs and expenses. NIAS Nevada Institute of Autonomous Systems NLA New Large Aircraft NLR Noise Level Reduction NNHC Northern Nevada Health Consortium NNKK Northern Nevada Kart Klub NM Nautical Mile NOAA National Oceanic and Atmospheric Administration Noise Compatibility Plan A portion of a Part 150 Study which outlines how an airport will mitigate, through aircraft operations, structural noise insulation or land acquisition, the airport noise impact within certain average noise levels. Noise Exposure Map A map that identifies and quantifies the noise impacted areas surrounding the airport. Non-Airline Revenue Airport revenue earned from sources other than airlines, such as concession revenues: Merchandise, Food and Beverage, Rental Car, etc. Airports try to maximize non airline revenue to help reduce the amounts they collect from the airlines. Non-Rate Base Revenue Revenue not included in the airline rate calculations due to provisions of a revenue bond covenant or an airline agreement. Non-Signatory Airline Airlines that have not signed an agreement with an airport committing to rent an airport leasehold for a fixed period of time.

347 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 12 – Acronym and Glossary

NOTAM Notice to Airmen NPIAS National Plan of Integrated Airport Systems NPRM Notice of Proposed Rule Making NRS Nevada Revised Statute NTE Not to Exceed NTP Notice to Proceed NTSB National Transportation Safety Board NVBGH Nevada Business Group on Health NWS National Weather Service O & D Origin and Destination O & M Operations & Maintenance - Usually refers to cost O/S Oversized belt system (Baggage Handling System) OAG Official Airline Guide OFA Object Free Area OFZ Object Free Zone OSHA Occupational Safety & Health Administration - Federal Agency responsible for work environment OSR On-Screen Resolution Room (TSA area) OTA Other Transaction Agreement (with TSA) PAPI Precision Approach Path Indicator PARCS Parking Revenue Control System PAX Passenger PBX Private Building Exchange - Private telephone system PC Personal Computer PCI Pavement Condition Index and/or Payment Card Industry PCCP Portland Cement Concrete Pavement PCN Pavement Condition Number PCN Position Control Number PDEW Passenger Daily Each Way PEBP Public Employee Benefits Program PEHP Post-Employment Health Plan PERS Public Employees' Retirement System PFC Passenger Facility Charge - A $4.50 charge per passenger per airport levied by the airlines that is sent to the respective airport, less an $0.11 administrative fee. The PFC may not be levied until after an airline review and FAA approval process.

348 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 12 – Acronym and Glossary

PIDS Perimeter Intrusion Detection System PIO Public Information Officer PM/CM Program Management/Construction Management PP& E Property, Plant & Equipment - Items that will have a useful life exceeding one year and a unit cost greater than $5,000 and are paid under one invoice. PRCS Parking Revenue Control System Proprietary Fund In governmental accounting, a fund having profit and loss aspects, which under generally accepted accounting principles, must use the accrual basis rather than a modified accrual basis of accounting. The two types of proprietary funds are the Enterprise Fund and the Internal Service Fund. PSA Professional Services Agreement QTA Quick Turn Around RAC Rent-a-Car RADAR Radio Detection & Ranging RAFFA Reno Airport Fire Fighters Association RARA Reno Air Racing Association RASC Regional Air Service Corporation RASM Revenue per Available Seat Mile RAVEN Regional Aviation Enforcement - Sherriff & Reno Police Department REIL Runway End Identifier Lights Residual Rate Setting An airline rate setting method that permits aeronautical users to receive a cross-credit of non-aeronautical revenues to reduce air carrier fees; in exchange the air carrier agrees to cover any shortfalls in revenues to cover airport costs either as a whole or by cost center. A residual rate structure may be accomplished only with agreement of the users.

RFB Request for Bids RFI Request for Information RFID Radio Frequency Identification RFP Request for Proposal RFQ Request for Qualifications RI Runway Incursion RIAT Runway Incursion Action Team

349 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 12 – Acronym and Glossary

RIF Reduction in Force RJ Regional Jet ROD Record of Decision RON Remain Overnight RPZ Runway Protection Zone – A zone, defined by the FAA, at each end of a runway that is to be protected from development that might affect the operation of the runway. RSA Runway Safety Area RSAT Runway Safety Action Team RTAG Reno Tahoe Aviation Group RVR Runway Visual Range RWY Runway - RWY or R/W SCCA Sports Car Club of America SEC Securities Exchange Commission SID Standard Instrument Departure SIDA Security Identification Area - Secure areas of the airport in which identification badges are required to be displayed. Signatory Airline An airline that has signed an agreement with an airport committing to rent terminal leased space and pay landing fees for a fixed period of time. SIP Sound Insulation Program Small Hub Airport An airport defined by the Federal Aviation Administration as handling 0.05% to 0.25% of the country’s annual passenger boardings. SMS Safety Management System SNJC Sierra Nevada Job Corps SOP Standard Operating Procedure SRMP Safety Risk Management Panel sUAS Small Unmanned Aircraft System SSI Sensitive Security Information SSP Select Service Partners - Airport food vendor STAR Standard Terminal Arrival Route SWAAAE Southwest Chapter of the American Association of Airport Executives T1 A High Capacity Data Telephone Circuit TAF Terminal Area Forecast

350 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 12 – Acronym and Glossary

TERPS Terminal Instrument Procedures TFR Temporary Flight Restriction T-Hangar A small hangar that resembles a “T” when viewed from above. T hangars are placed next to each other, and inter locked back to back, to maximize the number that can be placed in an area which minimizes the land rental component of their cost. THRIVE RTAA Values - Teamwork for Results, Honesty & Integrity, Respect & Recognition, Inspire & Innovate, Versatility, Enthusiasm TMSTR Teamsters Union TNC Transportation Network Company - Uber and Lyft TORA Takeoff Run Available TOD Transit Oriented Development TODA Takeoff Distance Available TRACON Terminal Radar Approach Control TRAFFIC Passengers TSA Transportation Security Administration - A component of the Department of Homeland Security with primary responsibility for the security of civil aviation. TWY Taxiway - TWY or T/W UAS Unmanned Aircraft System UAV Unmanned Aerial Vehicle ULP Unfair Labor Practice - A change or determination made against an employer or an organized employee organization that required certain actions, decided by the Nevada Employee Management Relations Board UPS Uninterruptable Power Supply USC United States Code USAF USDOD United States Department of Defense - USDOD or DOD USDOT United States Department of Transportation - USDOT or DOT USFS United States Forest Service (Dept. of Interior) USF&WS United States Fish and Wildlife Service - or USFWS VASI Visual Approach Slope Indicator VBIED Vehicle Borne Improvised Explosive Device VFR Visual Flight Rules VMC Visual Meteorological Conditions

351 Reno-Tahoe Airport Authority FY 2017-18 ANNUAL BUDGET Section 12 – Acronym and Glossary

VOIP Voice Over IP (Internet Protocol) VOR Very High Frequency Omni-directional Range VOR/DME Very High Frequency Omni-directional Range collocated with Distance Measuring Equipment VORTAC Very High Frequency Omni-directional Range/Tactical Air Navigation WAN Wide Area Network WC Workers Compensation WED West End Development at Reno-Stead Airport Wi-Fi Wireless Fidelity (wireless Internet access) WWW World Wide Web WX Weather YIELD Cents per mile based on airfare & mileage

352 Reno-Tahoe Airport Authority P.O. Box 12490 Reno, NV 89510-2490