MEMORANDUM ITEM 3
TO: Management & Operations Committee
FROM: Gary Schmidt, Director - Reliever Airports (612) 726-8135
Evan Wilson, Attorney (612) 794-4465
SUBJECT: PROPOSED REVISED RELIEVER LEASE POLICIES
DATE: April 24, 2014
INTRODUCTION
The Reliever Airports Lease Policies, Rules and Regulations (“Policies”) serve as an information tool to prospective and current tenants and provide guidance and authority to Commission staff and the Reliever Airports Staff Lease Committee regarding the leasing of Commission land at its six (6) Reliever Airports. The Reliever Airports Staff Reliever Lease Committee (“Lease Committee”) considers requests for lease transactions and is the liaison between the tenants and Commission on lease related issues. Although the Lease Forms provide the basis for the contractual relationship between the tenant and the Commission, the Policies enumerate and expand on some of the contractual requirements and are incorporated into the Lease Forms.
BACKGROUND
The Reliever Airports Lease Policies were originally adopted by the Commission in 1977 and revised in 1985, 2000 and again in 2012.
Today, staff is presenting another set of proposed revisions to the Policies, that are generally described below and that include two fueling policies.
OVERVIEW OF REVISIONS
Fueling Policies
When airport owners or sponsors accept funds from FAA-administered airport financial assistance programs, they must agree to certain obligations, called Grant Assurances. These obligations require the recipients to maintain and operate their facilities safely and efficiently and in accordance with specified conditions.
One of the Grant Assurances provides that owners and operators of aircraft have the right to self-service their own aircraft and equipment, subject to reasonable requirements of the airport owner. The right to self-service includes the right to self-fuel. MAC staff has set forth the requirements related to self-fueling at the Reliever Airports in a draft Self-Fueling Policy. (See Section XIX-I on page 41 of the attached Policies). The Self-Fueling Policy is intended to allow self-fueling under conditions that ensure the safe and efficient operation of the Reliever Airports, and under conditions that are not detrimental to the public welfare.
In addition, MAC staff has developed a draft policy allowing non-retail commercial fueling by aircraft management companies that meet specified requirements. (See Section XIX-II on page 51 of the attached Policies.) The Non-Retail Commercial Fueling Policy is outside the Grant Assurance requirements, but contains similar physical and operational requirements as the Self-Fueling Policy.
Both fueling policies require the operator to obtain a permit allowing the activity from the Commission. A draft permit is attached in its generally anticipated form. In addition, a request from a storage tenant for a self-fueling permit will require a lease amendment allowing the installation of a fuel storage tank; and a request for a non-retail commercial fueling permit will require a lease amendment allowing the fueling activity and a determination of the minimum standards that must be met. Each request for either a self-fueling permit or non-retail commercial fueling permit, and any corresponding lease amendment, will require consent of the MAC full Commission.
Additional Revisions
MAC staff is proposing the following additional revisions to the Policies:
· Section IV.E. (page 3): Revised to remove requirements related to a “ground rent surcharge” that no longer exists under the Reliever Airports Rates & Charges Ordinance.
· Section V.C.(ii) (page 7): Revised to waive the requirement that a proposed assignee of a storage lease have sufficient aircraft to justify the need for the hangar space, if the assignment is to a family member as a result of a tenant’s death.
· Section XVI.H.3 (page 31): Revised to comply with statutory changes regarding indemnification, by allowing an owner’s protective liability policy issued in the name of MAC.
· Attachment E: Revised to add an automatic renewal provision to the Sublease License Agreement.
PROCESS
After considerable internal discussion and development of the fueling policies described above, MAC conducted an informational meeting to present the draft fueling policies to the tenants. All Reliever Airport tenants were mailed notice of the meeting and provided web-links to drafts of the proposed fueling policies on March 5, 2014. At this meeting, staff presented the fueling policies, and allowed tenants an opportunity to ask questions and offer additional comments. The comments were limited, and primarily focused on the availability of motor vehicle gas (MOGAS) for recreational aircraft.
After consideration of the comments, staff made revisions clarifying aircraft eligibility requirements applicable to charter operators under the Self-Fueling Policy, and clarifying certain documentation requirements in both fueling policies.
The fueling policies are now in final form, and have been incorporated into the proposed Policies.
On April 28, 2014, MAC staff provided written notice to all Reliever Airport tenants of the May 5, 2014 Management & Operations Committee meeting and the proposed changes to the Policies as generally described above.
Please find attached:
1. A redlined version of the proposed Reliever Airports Lease Policies, Rules & Regulations; and
2. A draft permit in its generally anticipated form.
COMMITTEE ACTION REQUESTED:
RECOMMEND THAT THE FULL COMMISSION ADOPT THE REVISED AND PROPOSED RELIEVER AIRPORTS LEASE POLICIES, RULES AND REGULATIONS, AND THAT THE EXECUTIVE DIRECTOR/CEO OR HIS DESIGNEE BE AUTHORIZED TO SIGN THE NECESSARY DOCUMENTS.