DATE: April 25, 2023
TO: Mayor and City Council
FROM: Director of Public Works
SUBJECT
Title
Airport Rental Rate Adjustment: Adopt a Resolution Amending the FY24 Master Fee Schedule and Adjusting Hayward Executive Airport Hangar Rental Rates
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RECOMMENDATION
Recommendation
That the Council adopts a resolution (Attachment II) authorizing an amendment to the FY24 Master Fee Schedule, which would increase monthly Airport hangar rental rates by 8.5%; and implements changes to the Master Fee Schedule for FY24, which would increase monthly rents associated with storage rooms, office spaces, and tiedown spaces by 8.5%.
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SUMMARY
The Airport operates as an enterprise fund and relies solely upon the revenue it generates to fund its operating and capital improvement budgets. Accordingly, the Airport does not receive any financial support from the City's General Fund.
Airport staff regularly monitor the operating budget to reduce costs and adjust revenue so that the Airport can remain in good financial health. For example, commercial rents were increased in January of 2023 by the maximum-allowed amount of 7%. Staff has also been successful in applying for and receiving monetary grants from the Federal Aviation Administration (FAA) and California Department of Transportation (Caltrans) to fund capital projects, totaling approximately $3 million over the past ten years. The objective, in conformance with Council directives and FAA standards, is to become and remain financially self-sufficient.
During 2017, a rental rate study was conducted by an independent consultant that determined rental rates were 51% below the market rate. Due to the findings from the study, staff recommended an annual increase of 10% per year over five years. However, after extensive discussions with tenants, an agreement was reached that considered annual increases of 2.5% to 5% per year during the next four fiscal years. On January 15, 2...
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