2019-01-14-minutes-public-works-study-session

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KITTITAS COUNTY DEPARTMENT OF PUBLIC WORKS PUBLIC WORKS — BOARD OF COUNTY COMMISSIONERS STUDY SESSION STAFF REPORT STUDY SESSION DATE: January 14, 2019 TOPIC: ELN Land Lease Modeling Results ACTION REQUESTED: Provide Direction LEAD STAFF: Mark R. Cook RECOMMENDATION: Provide direction regarding the Board's preferred land lease approach at Bowers Field. BRIEFING SUMMARY: • Pursuant to a recent Board request, Public Works (PW) has completed requested ELN land lease modeling • Modeling results are attached as EXHIBIT 1 • Rate model, assumptions and projected future expenses reflect a confidence level less than 100 percent BACKGROUND: During an airport briefing on January 3, 2019; the Board requested PW to evaluate three fixed land lease rate approaches: aggressive, moderate and low. Staff selected five year land lease increases supporting the direction of the Board. The rate increases are arbitrarily selected by the Airport Manager. DISCUSSION: The conclusion of the analysis is presented below: Pursuing a fixed rate land lease model (aggressive) for a 25 year period predicts minimal risk so long as other revenue streams are maintained and additional leases are added throughout the planning period. Recapitalization cost for hangar repairs are not forecast. Additional FAA ACIP projects are not identified beyond extension of runway 11-29. To minimize risk, the aggressive model could be modified to reflect a two cent increase in each five year planning period. That revenue model is not evaluated but the above analysis suggests the moderate and low scenarios fail to generate sufficient revenue offsetting predicted expenses in the planning period. FISCAL IMPACTS: Refer to the attached Exhibit. ATTACHMENTS: Exhibit l: Land Lease Rate Evaluation for Bowers Field Page 1 of 2 PUBLIC WORKS BOARD OF COUNTY COMMISSIONERS WORK SESSION STAFF REPORT