25 Fiscal management; Strategic planning
CITY COUNCIL AGENDA ITEM BRIEFING SHEET
Submittal Date: Originating Department: Presented By: Agenda Item No.:
03/02/09
Council Date: City Council Edwin Pickle 25.
03/23/09
RECOMMENDED MOTION:
Move to reevaluate construction of new hangers until after the new airport master plan is completed.
POLICY ISSUES):
Fiscal management; Strategic planning
BACKGROUND:
Council Member Pickle requested an action item on the construction of ten new hangers at Cox Field
Airport.
Although staff agrees that additional hangers at the airport would enhance services available to pilots
and should increase flight activity, the plan outlined in the accompanying memo from the Airport
Advisory Board has not been presented to staff for review. Upon preliminary review, construction of
new hangers appears to be consistent with the current Airport Master Plan.
There are, however, several areas of concern. First, the plan to finance the $480,000 cost assumes that
annual revenue from the current hangers ($68,448) is available for use to service the debt for the new
construction. If this revenue was going into an encumbered account for the airport and not being used,
this would be a viable approach. Unfortunately, the $68,448 is going to the General Fund and helps
support airport operations, expenses of which exceed its revenue. In addition, generally accepted
accounting practices dictate that only the revenue derived from the new asset be considered when
determining the return on investment (ROI). Other ROI considerations include the payback time (25
years using a simple payback method based on current rates and not incorporating other costs), the life
expectancy of the hanger, the maintenance costs over the lifespan, and the time value of the $480,000.
Second, if Council decides to encumber the revenue from existing hangers to service the debt on any
new hangers, the loss to the general fund will have to be made up by increasing taxes or other revenue
and/or decreasing expenses. It will take a little less than a %2 cent increase in the tax rate to compensate
for the lost revenue to the General Fund.
The third area of concern is that development of a new master plan will be underway within 60 days.
While it is very likely that the need for new hangers will continue to be in the plan, new hangers may not
make the list or it is more likely that other projects, such as drainage improvements or safety issues, may
have a higher priority. In any event, it would be premature to commit to such a large investment prior to
completion of the new master plan as it may prevent the City from investing in higher priority projects.
Fourth, TxDOT has stated that they will no longer help Cox Field maintain three active runways. The
Airport Advisory Board has discussed utilizing the abandoned runway to provide access to new hangers
along the old runaway. The proposed plan contradicts previous discussions and the debt service would
likely preclude development of hangers along the old runway for a period of time.
Fifth, this is project is not budgeted in FY 2008-2009. Such a large expense would have to come out of
reserves.
City of Paris Revised 2/04/08
. 000125
Sixth, the City has contracted to provide over $400,000 over four years to match TxDOT's more than $4
million investment in planning and airfield and safety improvements. It is prudent to wait until the next
budget cycle to determine if the City has the fiscal resources to commit another $480,000 to the airport.
Lastly, any improvements to the airfield, including the terminal development area, must be reviewed by
the Federal Aviation Administration and TxDOT Aviation before work can begin. TxDOT Aviation
staff recommends delaying action on any new hangers or other construction until after the new master
plan is completed (in about six months).
BOARD/COMMISSION RECOMMENDATION:
Approve construction of 10 T hangers west of the existing T hangers
EXHIBITS:
Council Member Agenda Item Request, cost estimate, and sign and marking plan
ACTION: BUDGET INFO:
❑ Financial Report ® Minute Order Expense $
❑ Department Report ❑ Resolution Budgeted Amt. $
❑ Presentation ❑ Ordinance YTD Actual $
❑ Public Hearing ❑ Other Acct. Name
Acct. Number
FISCAL NOTES:
REVIEWED AND APPROVED Bv:
® Administration ® City Clerk ❑ Community Development ❑ EMS/IT ® Finance ❑ Fire
❑ Municipal Court ❑ Legal ❑ Library ❑ Police ® Eng./Public Works ❑ Utilities
City of Paris Revised 2/04/08
w 00012"'1
COUNCIL MEMBER AGENDA ITEM REQUEST
Please complete this form if you wish to have an item placed on the agenda for a City Council
meeting. To allow adequate time to prepare packets and to coincide with staff's deadline for
items, the due date for placing an item on the agenda is noon Thursday, 12 days prior to the
regular meetings on the second and fourth Monday of each month (i.e. the Thursday immediately
following a regular Monday meeting). In order for your fellow Council Members to fully
understand your item, have productive discussion, ensure efficient council meetings, and for staff
to be able to assist you as completely as possible, it is important that you describe the item with
as much detail as possible and include any supporting documentation so that it may be included
in the Council's meeting packets. Please return this completed form to the City Manager and
contact the City Clerk at (903) 784-9248 if you have any questions.
Council member making request:
❑ Will Biard ❑ Joe McCarthy
❑ Steve Brown ® Edwin Pickle
❑ Jesse Freelen ❑ Rhonda Rogers
❑ Kevin Kear
Description of Item: Construction of 10 new hangers at Cox Field
Are additional sheets or supporting materials attached? ® Yes ❑ No
I request that this item be placed on the agenda for the:
® City Council meeting on this date: March 9, 2009.
❑ Sometime in the next 2 meetings
❑ No specific time in mind -just keep it on a list of pending issues
Signature: Date: March 2, 2009
. 000130
The Airport Advisory Board and the Airport Manager would like to request that the City of Paris
build 10 more T hangers at Cox Field. Currently there are approximately 30 people on the
waiting list for hangers. We feel all hangers would be rented in short order and begin to repay
the cost of construction. These hangers would help promote the City of Paris as a place that is
actively supporting aviation and growth at the airport. Listed below is a list of reasons why we
feel new hangers are essential to Paris.
1. As stated before with 30 people on the waiting list they would all be rented.
2. There is a shortage of hanger space in this area, ask any of the local pilots who fly around and
they will tell you that nearly every airport out there has a waiting list for hangers.
3. Some of the people on the waiting list are not from this area, in fact we frequently receive calls
from people wanting to retire who have an airplane and are looking for a place that has hangers
available. These people would move to this area, buy a house and spend their retirement
income locally.
4. This would increase fuel sales which the City of Paris receives a percentage of.
5. In the last 9 years almost no new construction has taken place at Cox field. Other airports in the
area have had more growth than us and have built new hangers and made more improvements
to their runways and taxiways.
6. Cox Field is still the best Airport in Northeast Texas, we need to start making it grow more to
help it maintain that status. We should (and are) trying to make it grow in every way that makes
economic sense, building hangers is a good way to continue this growth.
Attached are the estimated cost of construction from local companies that would be interested in
constructing the hangers.
Airport Manager Head Airport Board Airport Board Member
Jerry Richey Vic Ressler Jack Ashmore
Airport Board Member Airport Board Member Airport Board Member
Bill Boothe Billy Copeland Glenn Chapman
Total Projected Cost: $480,000.00
R.K. Hall (dirt and slab work) $232,598.00
Cunningham Steel (steel & labor) $244,071.00
Each unit rents for $162.00/mo. _ $19,440.00 annual rents
Current unit rentals = $68,448.00 annual rents
Total = $87,888.00 annual rents
Current debt service =$9,677 annual payment ($19,354 Balance consisting of
two more annual payments of $9,677)
w P00131
I 1 ,F
~1 !1 I
1 l 1 I~ ~
j
1 ~ 1 ~ J
TAXIWAY C
I
t I
>O I
1 r ~ p ti\ / j f/
l I O , \
TAXIWAY B 1 x
I{( Q1~ -zw• z
• ---•-~-•~J T ~ O
Lf I t 1 ~ / TAXIWAY B
I /
1 I 3
I ~ I
1 I O
35
! 1 I
i !
i I I
I IW E
:1~ I I
s
1 I
~ i
COX FIELD
e n PARIS, TEXAS
m & MARKING PLAN
n 6 ~ i ~ 6 SIGN Q''IT6' DR' F41R15