MEETING NOTICE CITY OF PAGE CITY COUNCIL

CITY COUNCIL SPECIAL MEETING DECEMBER 27, 2016 CITY HALL, 697 VISTA AVE 6:30 P.M. PAGE, ARIZONA NOTICE OF PUBLIC MEETING AND AGENDA

1. CALL TO ORDER

2. INVOCATION

3. PLEDGE OF ALLEGIANCE

4. ROLL CALL Mayor Bill Diak Vice Mayor John Kocjan Councilor Scott Sadler Councilor Korey Seyler Councilor Mike Bryan Councilor Levi Tappan Councilor Dennis Warner

5. NEW BUSINESS

1. Discussion and possible action by the City Council pertaining to a re-bid for (EAS), or a recommendation for an air carrier for the Page Municipal Airport

ADJOURN

FOR YOUR INFORMATION Next Regular Meeting Wednesday, December 28, 2016, at 6:30 p.m.

Pursuant to A.R. S. 38.431. 02, notice is hereby given to the members of the City Council and to the general public that the Page City Council will hold a meeting open to the public. Supporting documents and Staff reports, which were furnished to the City Council, with this agenda, are available for review at www.citvofpage.org or at the City Clerk's Office. Council Members of the City of Page City Council will attend either in person or by telephonic conference. City Council may vote to go into Executive Session for the purpose of obtaining legal advice from the City Attorney on any item listed on the agenda, pursuant to A.R.S. 38-431.03 (A)(3). City Council may modify the agenda order, if necessary. This agenda may be subject to change up to 24 hours prior to the meeting.

Persons with disabilities should call Kim Larson, City Clerk, at 645-4221 (TDD 645-4216) for program and services information and accessibility.

NOTICE TO PARENTS: Parents and legal guardians have the right to consent before the City of Page makes a video or voice recording of a minor child A.R.S. §1-602.A.9. City Council meetings are recorded and may be viewed on South Central Communications, Channel 4. If you permit your child to participate in the City Council Meeting, a recording will be made. If your child is seated in the audience, your child may be recorded, but you may request that your child be seated in a designated area to avoid recording. Please submit your request to the City Clerk at 928-645- 4221.

If you would like to receive City Council agendas via email, please send your email address to [email protected] or call 928-645-4221.

CERTIFICATION OF POSTING OF NOTICE The undersigned hereby certifies that a copy of the attached notice was duly posted at the following places: City Hall Bulletin Board located at 697 Vista Avenue, Page, Arizona, Justice Building Bulletin Board located at 547 Vista Avenue, Page, Arizona, U. S. Post Office Lobby located at 44 Sixth Avenue, Page, Arizona, on the ____ day of December, 2016, at _____p.m. in accordance with the statement filed by the City of Page City Council with the City Clerk.

DATED this ____ day of December, 2016.

CITY OF PAGE

By: ______CITY CLERK'S OFFICE

CITY OF PAGE REQUEST FOR COUNCIL ACTION

NEW BUSINESS 1. City Council Special Agenda Meeting Date: 12/27/2016 Brief Title: Essential Air Service Presented by: Crystal Dyches, City Manager Department: City Manager Action: Motion

RECOMMENDED ACTION: Motion to ______.

BACKGROUND:

At the December 12, 2016, joint City Council/Airport Advisory Board Work session, the Council and Board members heard presentations from Via Air, Great Lakes Aviation, Ltd, and Boutique Air regarding their proposals to provide Essential Air Service for the City of Page. Sky West Airlines did not submit a proposal, but asked the City Council to make a request to the Department of Transportation (DOT) to Re-bid Essential Air Service.

At the December 14, 2016 City Council Meeting, the City Council passed a motion to "recommend that the (DOT) re-bid the proposals for Essential Air Service for the City of Page Municipal Airport" Mayor Diak, Vice Mayor Kocjan, Councilors Warner and Seyler voting in favor, and Councilors Bryan, Sadler, and Tappan voting against.

Staff has since learned that the Federal Aviation Administration (FAA) requires that commercial airports flying category C-11 aircraft (Via Air's ERJ-145 and Sky West's CRJ-200) have a standard safety area (RSA) of 1000.

In addition, the Page Airport TSA Holding Area would need to expand to hold a minimum of 30 passengers.

The Page Airport has can accommodate an RSA of approximately 600 feet on the North and 400 feet on the South. Our Airport Engineer Rich Graham (C&S Companies) has advised: “The safety area beyond departure end needs to be 1,000 feet. The safety area before the threshold needs to be 600 feet (see attached page from the FAA Advisory Circular). The 1,000-foot departure end safety area can be reduced to 600 feet using EMAS, but the 600-foot approach safety area cannot be decreased.

While the 600-foot safety area on the north side can be achieved with minimal changes to the airport property boundary and fence line (see attached image), to get 600 feet off the south end is going to require a significant amount of earthwork and property acquisition because there is a wash/eroded channel right outside the fence (see attached image – yellow line ends at 600 feet).

The estimated $7.5 million cost of EMAS does not make this a feasible option now.

With all that would be involved in constructing the safety areas to the standards for a jet airline, the quickest and most feasible option would be to displace the thresholds. I have spoken with Jared at FAA to see what their position is on creating those displacements (they will refer to them as declared distances). The north end would need to be displaced at least 400 feet and the south end would need to come in by about 650 feet to fit within the existing property boundary.” Ideally, this change would be discussed and included in the 2018 Master Plan update. It the City Council want to move toward becoming a D2 airport now, an updated Airport Layout Plan and clearances from the Part 139 Inspector would be required.

An e-mail from Kevin Schlemmer, Chief of the Essential Air Service and Domestic Analysis Division with the US Department of Transportation advised that: “The community can, in their comments, request a re-bid, but would need to outline why none of the proposals are valid or acceptable. It would be unusual given that multiple proposals were received, but it can be done. We would need to review the reasoning to determine if we would go through with a re-bid.”

Staff has consulted with Michael Mooney, Air Service Strategy and Development Consultant, Sixel Consulting to better understand what the DOT staff might consider a valid argument for re-bid. I have included a draft letter done in consultation with Sixel Consulting to Department of Transportation requesting a re-bid for your review and revision.

ALTERNATIVES CONSIDERED: Recommend Via Air, Great Lakes Aviation, Ltd, or Boutique Air to provide Essential Air Service for the City of Page.

ADVISORY BOARD / COMMISSION ACTION: The Airport Board recommendation was to accept Boutique Air’s proposal with at least two flights a day to Phoenix, one flight to Los Angeles, California, and to look at servicing Denver, Colorado.

Fiscal Impact Budget Impact: Unknown

Attachments DRAFT RSA

December 27, 2016

Mr. Michael Gormas Transportation Industry Analyst US Department of Transportation Office of Aviation Analysis 1200 New Jersey Avenue SE Room W86‐472 West Building Washington D.C. 20590

Reference: Docket DOT‐OST‐1997‐2694

Dear Mr. Gormas,

The community of Page, Arizona herein provides its community comments on the current Essential Air Service (EAS) contract process under Docket 1997‐2694.

In late October three carriers (Boutique Air, Great Lakes and Via Airlines) made proposals to provide EAS service at our community. The DOT requested our comments on the three proposals by early December. We requested and were granted an extension until December 28, 2016 to provide our comments to the Department.

We begin by thanking all three carriers for their interest in our market and the time and effort put forth to develop the proposals and present them to us. However, after considerable local discussion and research and after one‐on‐one interviews with each of the three carriers we wish to request a re‐bid of our EAS service.

Our reasons for making this request are as follows;

, after many years of serving our community, is simply a carrier in decline. For far too many months and years now Great Lakes service at our community has been unreliable and our enplanements demonstrate that. For the sake of our community’s economic growth and prosperity, which depends significantly on air service, we must join the dozens of other EAS cities nationwide that have successfully moved past Great Lakes to other EAS air service providers. The DOT is well aware of Great Lakes struggles for the past three plus years and the Department has fined the carrier for extensive failure to fulfill its EAS contract obligations in multiple markets. We wish Great Lakes well and hope they can rebuild their airline but we simply cannot risk our economy further by relying on them for EAS service at this time.

 We have discovered that Via Air is having very significant operational issues with its expanded EAS services in West Virginia and Virginia. Via Air’s proposal envisions the use of regional jets with very limited payload capability during our peak summer season.

Combine that with Via Air having no network carrier ticket and bag agreements and no established airline operations west of the Mississippi River and we believe that we simply cannot consider this carrier until it has a much more extensive and proven track record providing airline service and has some form of operational base in the western United States.

 Boutique Air has offered us five route/service options, each available with either a 9‐seat twin engine aircraft or an 8‐passenger single engine aircraft. We choose at this time to reject all single engine proposals. The five twin engine proposals range in subsidy need from nearly $4.6 million (option 3) to just over $3.5 million (option 5). We have discovered that option 5 with service to Phoenix will access the Phoenix terminal via Terminal 2, where only 9% of Phoenix’s airline seat capacity operates. Access to nearby Terminal 3 (with 10% of Phoenix capacity) requires a walk or shuttle and TSA re‐ screening. Access to Phoenix Terminal 4 (81% of Phoenix seat capacity) requires a walk and shuttle or walk and SkyTrain shuttle plus TSA re‐screening.

 SkyWest Airlines, the leading regional carrier in the United States, has advised us that they have gained the permission of one of their network carrier partners to make a proposal to provide Page EAS service, should there be a re‐bid. The only reason that the carrier did not bid initially is that network partner permission to bid was not obtained until after the bid deadline. We understand from the carrier, which the DOT can confirm, that SkyWest believes it can provide network coded regional jet service at Page that will generate over 20,000 annual O&D passengers for an annual subsidy lower than or in the range of any current proposal except that of Great Lakes discredited Option 1.

Basically, with Great Lakes and Via Air removed from consideration and Boutique’s single engine proposals removed from consideration we are left with Boutique’s King Air options, ranging in subsidy need between $4.6 million to $3.5 million and involving various combinations of the hubs of Denver, Los Angles and Phoenix. Boutique Air has rapidly established themselves as a good EAS service provider.

However, the carrier currently has no interline ticket and bag (T&B) agreements in place. We understand that the carrier has reached an agreement for a T&B with a network carrier and we congratulate the carrier on that difficult accomplishment. However, Boutique’s current gate in Los Angeles almost a from the gate complex location of its new T&B partner. Its T&B partner has less than 40 departures a day at Phoenix and those are focused on seven carrier hubs. Its T&B partner does offer significant services at Denver however the only Denver proposal (Option 2) costs over $4.4 million dollars.

We believe a re‐bid will result in a SkyWest network coded RJ proposal generating over 20,000 annual O&D and requiring subsidy at or under all current proposals except discredited Great Lakes proposal 1.

SkyWest/Expressjet is an outstanding EAS provider and provides network coded regional jet EAS service at 24 cities; 14 under the Delta code, 8 under the United code and 2 under the American code.

The track record of network coded regional jet service in EAS cities is one of the outstanding success stories in EAS. With rare exception network coded EAS regional jets produce very significant O&D traffic with stable to declining EAS subsidy needs. Furthermore, EAS cities with network coded regional jets rarely face carrier operational issues and several have made their way out of EAS subsidy need or seen EAS subsidy need decline to insignificance by comparison to the needs of EAS cities without network code and regional jets.

We believe we have the priceless opportunity here to gain global carrier air service. This will be invaluable to our tourism industry and to our local residents. And this opportunity is likely to be proposed in re‐bid for a subsidy need on the low end of the options available to us now and it will produce significantly more passengers than any proposal we have before us now. Basically we believe we can gain network coded regional jet service to a global carrier hub for the same approximate cost as the lowest cost current Boutique Air King Air proposal. Over time we believe a re‐bid and SkyWest service, if bid and awarded, will lower Page EAS subsidy costs and generate significantly more O&D passengers than any current option.

We respectfully request that the Department grant our request for a prompt re‐bid so we can gain this network regional jet service that is the goal of any EAS city and indeed of the Department itself, all for a subsidy amount in line with any viable option we can currently choose from.

Thank you in advance for the fullest consideration of this very important request.

Best regards,