This action is to approve the rental rate adjustments for aircraft hangars at the five County airports: San Gabriel Valley in the City of El Monte, Compton/Woodley in the City of Compton, Whiteman in the Pacoima area of the City of Los Angeles, Brackett Field in the City of La Verne, and General William J. Fox Airfield in the City of Lancaster.

SUBJECT

August 15, 2017

The Honorable Board of SupervisorsCounty of Los Angeles383 Kenneth Hahn Hall of Administration500 West Temple Street Los Angeles, California 90012 Dear Supervisors:

TRANSPORTATION CORE SERVICE AREAAPPROVE AIRPORT RENTAL RATE ADJUSTMENTS FOR THE

FIVE COUNTY AIRPORTS: SAN GABRIEL VALLEY, COMPTON/WOODLEY, WHITEMAN, BRACKETT FIELD, AND GENERAL WILLIAM J. FOX AIRFIELD

(SUPERVISORIAL DISTRICTS 1, 2, 3, AND 5)(3 VOTES)

IT IS RECOMMENDED THAT THE BOARD:

1. Find that the action set forth in this Board letter is not a project pursuant to the California Environmental Quality Act.

2. Approve the rental rate adjustments for aircraft hangars at the five County airports: San Gabriel Valley in the City of El Monte, Compton/Woodley in the City of Compton, Whiteman in the Pacoima area of the City of Los Angeles, Brackett Field in the City of La Verne, and General William J. Fox Airfield in the City of Lancaster effective upon Board approval.

3. Instruct the Director of Public Works or his designee to notify the County's Airport Management Contractor, American Airports Corporation, of the rental rate adjustments.

PURPOSE/JUSTIFICATION OF RECOMMENDED ACTION

The purpose of the recommended actions is to obtain the Board's approval of rental rate adjustments, specifically an 8 percent increase in the nonaviation storage surcharge for aircraft hangars at the five County airports: San Gabriel Valley, Compton/Woodley, Whiteman, Brackett Field, and General William J. Fox Airfield to become effective upon Board approval and instruct the Director of Public Works or his designee to notify the County's Airport Management Contractor, American Airports Corporation, of the rental rate adjustments.

Background

On January 22, 1991, Synopsis 62, the Board approved a contract for a private firm to manage, operate, and maintain the County airports. On March 16, 2016, the Board approved Amendment No. 6 to the contract authorizing many changes to various contract terms and provisions including various scope of work items, increased payments to the County, reduced contract costs, adoption of the current Living Wage Program requirements, and extension of the term of the contract by 5 years. The contract provides for the Board to retain control over the rental rates, and the contractor is allowed to seek adjustments in the rental rates once per year.

The contractor's payments to the County were increased on May 1, 2017, by 3 percent in accordance with the terms of the contract. The contractor has historically requested to increase aircraft hangar rents based on an equal percentage increase in the contractor's payments to the County. In an effort to reduce vacancies of hangars utilized for aircraft storage at the County airports, the contractor at this time has opted to forego an increase in rental rates for aircraft hangars utilized for aircraft storage. However, to bring the nonaviation storage surcharge, the additional rent imposed for those using aircraft hangars for nonaviation purposes has to be further in line with market rates for off-airport storage facilities. Therefore, the contractor has requested to increase the nonaviation storage surcharge by 8 percent. This would increase the nonaviation storage surcharge from 65 percent to 73 percent of the aviation rental rate. The proposed increases in the enclosed Fiscal Year 2017-2018 Annual Hangar Rental Rate Recommendation letter for nonaviation storage surcharge for the County airports will become effective upon the Board's approval. The Department of Public Works finds the rental rate adjustments are reasonable and justified.

Implementation of Strategic Plan GoalsThe County Strategic Plan directs the provision of Strategy III.3, Pursue Operational Effectiveness, Fiscal Responsibility, and Accountability. The recommended action allows the Aviation Enterprise Fund (M02) to fund improvements to the airport facilities, maintenance of airport infrastructure, and generates sufficient revenue to continue providing the established level of service and operation to airport users in a safe and effective manner.

FISCAL IMPACT/FINANCING

There will be no impact to the County General Fund.

The Honorable Board of Supervisors8/15/2017Page 2

The recommended rental rates will become effective upon Board approval. The proposed adjustments to the monthly rents for aircraft hangars approved for nonaviation storage surcharge at the County airports represent a potential increase in annual revenue from nonaviation hangar rent of approximately $135,827. All revenue generated from aircraft hangar rents will be shared between the contractor and the Aviation Enterprise Fund (M02) at a rate of 55 percent and 45 percent, respectively.

During Fiscal Year 2018-19 recommended budget, we will review/analyze the affected revenue budgets to determine if an increase adjustment is required.

FACTS AND PROVISIONS/LEGAL REQUIREMENTS

Enclosed Exhibit A, Statement of Work, of Agreement 64424 for Management and Operation of County Airports directs the contractor to “develop and submit recommended fee schedules and rental rates annually for County approval.”

The Los Angeles County Aviation Commission at its May 31, 2017, meeting reviewed the recommendation and voted unanimously to support the recommended increase of the Fiscal Year 2017-18 hangar rent nonaviation storage surcharge.

ENVIRONMENTAL DOCUMENTATION

The proposed project is not a project pursuant to the California Environmental Quality Act because it is an activity that is excluded from the definition of a project by Section 15378 (b) (4) of the State California Environmental Quality Act Guidelines. This proposed action is a government fiscal activity that does not involve any commitment to any specific project, which may result in a potentially significant physical impact on the environment.

IMPACT ON CURRENT SERVICES (OR PROJECTS)

This action will not have any impact on current services or projects.

The Honorable Board of Supervisors8/15/2017Page 3

CONCLUSION

Please return two adopted copies of this letter to the Department of Public Works, Aviation Division. Also, please forward one adopted copy to the Assessor, Possessory Interest Division; Auditor-Controller, Accounting Division; and County Counsel, Public Works Division.

MARK PESTRELLA

Director

Enclosures

c: AssessorAuditor-Controller Chief Executive Office (Chia-Ann Yen)County Counsel (Warren Wellen)Executive Office

Respectfully submitted,

MP:RLS:jgv

The Honorable Board of Supervisors8/15/2017Page 4

American Airports Corporation

July 25, 2017

Mr. Richard SmithChief, Aviation DivisionLos Angeles County Dept of Public Works900 So. Freemant Ave. A-9E, 1 S̀ FloorAlhambra, CA 91803-1331

Re: Clarification of the 2017/2018 Annual Hangar Rental Rate Recommendation

Dear Richard:

On March 315, 2017 we requested an increase to the non-aviation surcharge at each airportincreasing it from 65% to 73% and a 2% increase to the aviation hangar rental rates atWhiteman Airport in Pacoima and Fox Field in Lancaster. On May 17'", 2017 we withdrew ourrecommendation to increase the aviation hangar rental rates at those two airports and now onlyrequest approvals to increase the non-aviation surcharge at this time.

Please contact me if should you wish to discuss or have any questions.

Respec ul ,

Edwa R. SausePresident

2425 Olympic Bot~fevard

Suite 650 East

Santa Monica

CA 9044

Tel (310) 752- 855

Fax (310) 752-0570

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8.92

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$ r~~p0

$ 48

9.06

$ 54

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$ 54

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$ 4$

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1.97

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g

302.

00$ 27

3.66

$ 29

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$ 302 60

$ 27

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(End of CC § RD Rev

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$ 9@505

~ 86&05 ~

99.:00

S

12.05

$i,Q3Z81

$ 92

9.07

$ 103.80 5

12.Q5

$

84&.

10 $ 76

8.30

$

79.20

b 10

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$

889.

:22$ 80

6.18

$

83.O

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7~.3

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$ 7227

$ 65340 i

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$ 75

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$

fi 85A8 $ 7266 5

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$

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5 57

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$ 672.97$ 605 50 $

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$

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tfi 55

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2.82

$ 24220$ 22317 $

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1524$ 1.3

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85$1,2G2.25 $ 13

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5

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$ 1,3

05.1

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S

15.9

6$ 1,36&43

$1,23.03 $ 13840 S

15.9

6

$ 1,6

03..

20$ 90

2:55

$ 10

0,85

S

1226

$ 1.0

51.8

4$ 946:31 $ 15.53 9

12.2

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$ 89595$ BOfi.85 $

89.1

0$

i@.9

55 933.39

5 84

5.97

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10.9

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$ 49&30

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S

6.10

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x8.

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~ 33Q 00

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4.63

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{ C&G Row,

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p31.

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$ 81,Q0

$

1223$ 83L00

$

750.

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3

12.23

172 StandarU Hangars - 103 sq ft

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$ 51

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5

7.14

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1 7 Por

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~ 3~~p

$ 353.00

$ 40.00

S

5.75

$ 393.OU

$ 35

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$

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i -Hangars - 418 sq F

tG01 A, G12A, C07A, C08A)

y 288,0

$ 2f

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02 27

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$

4.25

$ 2p&6Q

$ 26100$

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$

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$ 249,0

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$

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5 ffi3.00$ 93.00

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$ g39A~$ 81

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$ 44

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$

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10.8

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17.8

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51.367.05 $ 'I53A5 S

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94.2

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42.06

5122t2D17 1422 AM

STATEMEN2' OE` W~RI{

CONTRACTOR sha11:

1. Manage anfl operate the airports for the use and benefit

of the County anci the general public seven days a week,

24 hours a day, in a safe and efficient manner and

maintain them in a clean, orderly, safe, and operational

condition in con~armity with all applicable Federal,

State and Zocal laws, rules and regulations.

2. Operate, maintain, and repair all airport grounds,

facilities and buildings, and provide all services as

are customary and usual to such operations, including,

but not limited to those described herein.

Maintain a written log of a1.1 complaints received, i.e.,

those concerning employee appearance, attitude, service,

lack of facility maintenance, car anything in connection

with airport operations, maintenance, or duel facility

operation. The lag shall contain the date of the

occurrence and what actican was taken, or the reason for

non-action.

3, Operate or provide far the operation, maintenance, and

repair of the aircraft fueling facilities and equipment,

maintaining responsibility for product quality control

and provide continuous service 24 hours, 7 days a week,

with no less than one person.

4. Operate or provide for the operation, maintenance, and

repair of Crash Fire Rescue (CFR) vehicles, including no

less than ane trained person available for emergency

respanse at night and no less than 2 trGined persons

available for emergency response during daylight hours,

7 days a week and 24 hours a day. Maintain a CFR

response log indicating time and method o~ notification,

response time to scene, and what occurs. Contact

appropriate agencies and till out Aircraft Accident

Report Form.

5. Enforce on behalf' of the Director of Public Works al.l

provisions of the Airgort Ordinance (Chapter 19.Q4,

Title 19, Los Angeles County Cade) and other applicable

Statutes qr rules.

6. Administer and manitar existing and future agreements

and leases with "Airport Tenants° {i.e., Fixed Based

operators, concessionaires, etc.? to insure eompiiance.

Provide the Director monthly reports on the current

status of each existing agreement and lease. Perform on

behalf of the County all obligations of the County and

insure al.l obligations of the "Airport Tenants" are

enforced, subject to the approval of Director of Public

Wanks and the Board of Supervisors. Examples of

obligations of the County and "Airport Tenants" can be

found in current airport leases.

7, Develop and submit recommended fee schedules and rental

rates annually far County approval. RecammendatiQns

wi11 be submitted to the Director and the Aviation

Commission along with a draft Board of Supervisors

"action request letter" prior to April lst of each year.

8, Prepare and negotiate new agreements and leases ~n a

timely basis, subject to the approval of the Director

and the Board of Supervisors. Provide the Director

monthly zeports on the status of new lease and agreement

negotiations.

9, Collect and reCOnCil~ all fees and payments due, using

uniform procedures to provide accountability, cantro2,

and security of funds. Provide the Director a monthly

report in a format acceptable to the Director on all

delinquent accounts and the methods being utilized to

collect the delinquencies.

10. Prepare and submit reports and statistical data

requested by the Director of Public Works and the Board

of Supervisors in a format acceptable to the Director.

For example, monthly financial and operational repots,

etc.. The Director will distribute copies of this

information to the Aviation Commission.

11. Attend monthly meetings of the Aviation Commission and

provifle explanations of the Propaser's operational

reports and responses to concerns of the Commission.

12. Prepare and submit for approval an annual operating

budget by December 1st of each year for the following

July - June Fiscal Year. The Annual Operating Budget

sha11 itemize all anticipated revenues and agerating

expenses with supporting records and documents.

13. Perform as necessary ~o insure a positive image for the

airports by being responsive t~ community complaints and

inquiries and organizing annual airport open houses ar

other events which foster good community relations.

Copies of community complaints and inquiries and the

Pragoser's responses should be forwarded to the Director

within five days. Maintain a community complaint iog

listing date, time, nature and disposition of

complaints.

14. Provide the Public Affairs and Advocacy Office of the

Department of Public Works timely information, as

requested by them, to an~t~'er inquiries by tha news

media. For example, information about aircraft

accidents, airspace problems, construction projects,

etc. Maintain media response iog.

15. CONTRACTOR may be requested to performance additional

items of work, iI1C11~d.f.,tlgr but not necessarily 13.mited to

the development of a comprehensive plan for the

development of each airport consistent with COtTNTY

planning and development to date. Any such additional

work will be separately fundad.

With the concurrence of DIRECTOR, CONTRACTOR may solicit

proposals for capital improvements and properly

development, and may evaluate such proposals for overall

consistency with CONTRA,CTOR's comprehensive plans.

CONTRACTOR will provide the results of its evaluations

to DIRECTOR. In the event CONTRACTQR shall have

alternative plans to conduct its own capital improvement

or development projects which are inconsistent with any

~ffart proposed by a third party, CONTRACTOR may submit

such prc~pasals and shall be granted by the DIRECTOR a

right to match or better the proposals far all capital

developments subject to future review and passible

agproval by COUNTY's Board of Supervisors.